Distinguish between ‘Fixed Capital Account’ and Fluctuating Capital Account’ on the basis of credit balance.
Fixed Capital account always has credit balance Whereas, the Fluctuating Capital Account may have credit or debit balance
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A group of 40 People wants to form a Partnership Firm. They want your advice regarding the maximum number of persons that can be there in a partnership firm and the name of the act under whose provisions it is given.
The Companies Act, 2013 (Section 464) empowers the Central Government to prescribe a number of partners in a firm subject to a maximum of 100 Partners. The Central government has prescribed a maximum number of partners in a firm to…
Is there any restriction on the maximum number of partners? if yes, name the act under which it is prescribed.
The Companies Act, 2013 (Section 464) empowers the Central Government to prescribe a number of partners in a firm subject to a maximum of 100 Partners. The Central government has prescribed a maximum number of partners in a firm to…
State any two essential features or characteristics of the Partnership other than a minimum number of partners and profit sharing.
The following are the two characteristics. Agreement:- The partnership comes into existence through an agreement, either written or oral. It is the basis of a relationship among partners, which may be for a particular venture, for a period, or at…
What is the maximum number of Partners that a partnership firm can have? Name the Act that provides for the maximum number of partners in a partnership firm.
The Companies Act, 2013 (Section 464) empowers the Central Government to prescribe a number of partners in a firm subject to a maximum of 100 Partners. The Central government has prescribed a maximum number of partners in a firm to…
Does Partnership firm has a separate legal entity? Given reason in support of your answer.
No, the Partnership firm does not have a separate legal entity from its partners. Since the firm’s debts are payable from the personal assets of the partners if the firm is unable to repay its liabilities.
Assertion (A): Partnership is a separate and distinct entity from partners from the viewpoint of accounting.
Ans – b) As per Business Entity Concept, the partnership firm is a separate entity from partners from the viewpoint of accounting. Thus all business transactions are recorded from the business point of view. For example when capital is introduced…
Assertion (A): Drawings against capital is transferred to Partner’s Current Account, if capital is fixed.
Ans – d) When Capital is fixed, the drawing against capital is recorded at the debit side of the Capital account itself. The Journal entry is Partner’s Capital A/c Dr. To Bank A/c Thus Assertion (A) is incorrect. Drawings against…
Assertion (A): Interest charged on drawings is debited to Profit and Loss Appropriation Account.
Ans – d) Interest Charged on drawings is the income to the firm. Thus it is credited to Profit and Loss Appropriation Account. Thus Assertion (A) is incorrect. Interest on drawings is not charged If Partnership does not exist or…
Assertion (A): Commission provided to partner is shown in Profit and Loss Account.
Ans – c) The commission provided to the partner is an appropriation. It is debited to Profit and Loss Appropriation Account. Thus Assertion (A) is incorrect. The commission provided to the partner is not charged against profit. It is an…