GYAN KUNJ ACADEMY
Banshi Bazar, Ballia 221717
Class XII – Accountancy (055)
Chapter 1: Accounting for Partnership Firms – Basic Concepts
Time Allowed: 3 Hours Maximum Marks: 80
General Instructions:
This question paper contains five sections: A, B, C, D, and E.
All questions are compulsory.
Marks are indicated against each question.
Section A: 15 MCQs + 5 Assertion-Reason based questions (1 mark each)
Section B: 3 Questions × 3 marks
Section C: 3 Questions × 4 marks (practical)
Section D: 3 Questions × 5 marks (practical)
Section E: 3 Questions × 6 marks (practical)
Section A (1 × 20 = 20 Marks)
Part 1: Multiple Choice Questions (1 mark each)
Q1. The amount of capital contributed by each partner is recorded in:
(a) Profit and Loss Account
(b) Balance Sheet
(c) Partners’ Capital Account
(d) Current Account
Q2. In the absence of a partnership deed, interest on capital is:
(a) 6% p.a.
(b) 9% p.a.
(c) Allowed only if there is profit
(d) Not allowed
Q3. Which account is not prepared under fixed capital method?
(a) Capital Account
(b) Current Account
(c) Revaluation Account
(d) All are prepared
Q4. Partnership is defined in:
(a) Indian Contract Act, 1872
(b) Companies Act, 2013
(c) Indian Partnership Act, 1932
(d) Income Tax Act
Q5. Partners share profits and losses equally if:
(a) Partnership deed is silent
(b) Partnership deed specifies it
(c) Capital contribution is unequal
(d) Salaries are different
Q6. Salary to a partner is credited to:
(a) Trading Account
(b) Profit and Loss Account
(c) Partners' Capital/Current Account
(d) Revaluation Account
Q7. The maximum number of partners allowed in a banking business is:
(a) 10
(b) 20
(c) 50
(d) No limit
Q8. Interest on drawings is:
(a) An expense for firm
(b) An income for firm
(c) A liability
(d) Debited to Profit and Loss Account
Q9. Under fluctuating capital method, which of the following is prepared?
(a) Only capital account
(b) Only current account
(c) Both accounts
(d) None of the above
Q10. Profit and Loss Appropriation Account is prepared:
(a) After the Profit and Loss Account
(b) Before Balance Sheet
(c) After Balance Sheet
(d) Before Trading Account
Q11. Which of the following is a fixed liability for the firm?
(a) Partner’s loan
(b) Capital
(c) Reserve
(d) Drawing
Q12. Goodwill brought in cash by a new partner is credited to:
(a) Revaluation Account
(b) Old partners’ capital accounts
(c) New partner’s capital
(d) None of the above
Q13. A partnership deed is:
(a) Optional
(b) Oral only
(c) A written agreement
(d) A government form
Q14. Commission to a partner is shown in:
(a) Profit and Loss Account
(b) Profit and Loss Appropriation Account
(c) Balance Sheet
(d) Partners’ Loan Account
Q15. Profit and Loss Appropriation Account is prepared by:
(a) Sole proprietors
(b) Partnership firms
(c) Joint stock companies
(d) None of the above
Part 2: Assertion and Reason (1 mark each)
Choose the correct option:
(a) Both A and R are true and R is the correct explanation of A
(b) Both A and R are true but R is not the correct explanation of A
(c) A is true but R is false
(d) A is false but R is true
Q16.
Assertion (A): Interest on capital is credited to partners only if allowed in the partnership deed.
Reason (R): Interest on capital is a right of every partner.
Q17.
Assertion (A): Profit and Loss Appropriation Account shows how profits are distributed among
partners.
Reason (R): It is prepared to distribute net profit among creditors.
Q18.
Assertion (A): A partnership firm has a separate legal entity from its partners.
Reason (R): Partnership is based on mutual trust and confidence.
Q19.
Assertion (A): Drawings made by a partner are debited to Profit and Loss Account.
Reason (R): Drawings are personal expenses of the partner.
Q20.
Assertion (A): Interest on drawings is charged from the partners.
Reason (R): It is considered as income for the business.
Section B (3 × 3 = 9 Marks)
Q21. Explain any three features of partnership.
Q22. Distinguish between fixed and fluctuating capital methods (any three points).
Q23. What are the rights of a partner when there is no partnership deed?
Section C (3 × 4 = 12 Marks) – Practical
Q24. A and B are partners with capital of ₹80,000 and ₹60,000 respectively. They share profits in 3:2
ratio. Net profit for the year is ₹50,000. Prepare Profit and Loss Appropriation Account assuming
interest on capital @10% p.a. and no other adjustments.
Q25. R and S are partners. R withdrew ₹4,000 at the beginning of each month during the year.
Calculate interest on drawings @12% p.a. using average period method.
Q26. X and Y started a firm with capital of ₹1,00,000 and ₹80,000. Their drawings during the year
were ₹12,000 and ₹8,000. Profit during the year was ₹60,000. Show Partners' Capital Accounts under
fixed capital method if interest on capital is 10%.
Section D (3 × 5 = 15 Marks) – Practical
Q27. A, B and C are partners. Their capitals on 1st April 2023 were ₹2,00,000, ₹1,50,000 and
₹1,00,000. Their partnership deed provides:
Interest on capital @10%
A’s salary ₹2,000/month
B to get a commission of 10% of net profit
Remaining profit to be shared in 3:2:1
Profit for the year was ₹1,80,000. Prepare Profit and Loss Appropriation Account.
Q28. X and Y are partners. Their capitals on 1st April were ₹1,50,000 and ₹1,00,000 respectively. Net
profit for the year is ₹72,000. Interest on capital @10%. X withdrew ₹12,000 and Y ₹9,000. Calculate
interest on drawings @6% p.a. using average method (withdrawals made in the beginning of every
month). Prepare Capital Accounts under fluctuating method.
Q29. Explain with examples how the following are treated in the books of accounts:
(i) Interest on drawings
(ii) Salary to a partner
(iii) Commission to a partner
(iv) Interest on capital
(v) Profit sharing ratio
Section E (3 × 6 = 18 Marks) – Practical
Q30. A, B, and C are partners sharing profits in the ratio 5:3:2. Their capitals are ₹3,00,000, ₹2,00,000
and ₹1,00,000 respectively. They withdrew ₹24,000, ₹18,000 and ₹12,000 respectively during the
year. Interest on capital @10%, interest on drawings @5%. Net profit for the year is ₹2,40,000.
Prepare:
(i) Profit and Loss Appropriation Account
(ii) Partners’ Capital Accounts (Fluctuating Method)
Q31. M and N are partners. Their capitals on 1st April 2023 were ₹1,20,000 and ₹80,000. M is
entitled to a salary of ₹3,000 per month. N gets a commission of ₹12,000 per annum. Net profit
before adjustments is ₹96,000. Interest on capital @8%. Prepare:
(i) Profit and Loss Appropriation Account
(ii) Partners’ Capital Accounts (Fixed Capital Method)
Q32. The partnership agreement between P and Q provides:
Interest on capital @12%
Salary to P ₹5,000 p.m.
Commission to Q ₹10,000
Sharing of profit in 3:2
Their capitals are ₹1,50,000 and ₹1,00,000 respectively. Net profit before above adjustments
is ₹1,20,000. Prepare Profit and Loss Appropriation Account and Capital Accounts under
Fluctuating method.
