Which of the following will not be shown in the debit of the Profit and Loss Appropriation Account?
Ans – c) Interest on Drawings as revenue (income) to the firm is recorded at the credit side of the Profit and Loss Appropriation Account.
Commerce School
Student Community
Archives Answers
Answer
Which of the following items is not dealt through the Profit and Loss Appropriation Account?
Ans – a) Explanation:- interest on Partner’s Loan is considered as a charge against profit. Thus it is recorded to the debit side of the Profit and Loss Account.
When a guarantee is given to a partner by some partners, deficiency on such guarantee is borne by
Ans – c) Explanation:- When a guarantee is given by one partner or a few partners to the other partners. The Deficiency is borne by only those partners who gave the guarantee.
Mohan, a partner, withdraws ₹ 20,000 on 1st April 2022 and ₹ 40,000 on 1st October 2022. Interest on Drawings @ 6% p.a. on 31st March 2023 will be
Ans – a) Explanation:-
Interest on the capital of a partner is a
Ans – c) Explanation:- interest on the partner’s capital is only an expense to the firm. Just an expense is neither a loss nor a profit to the firm. If the Revenue of the firm is greater than the total…
Ramesh, Rahul and Raman are partners. Raman withdrew ₹ 20,000 per month in the middle of the month. Interest on drawings charged for the year was ₹ 7200. The rate of interest on drawings is
Ans – d) Explanation:- in the absence of a partnership deed, the Indian Partnership Act 1932 Applies. The interest on the partner’s loan to the firm is charged @ 6% p.a.
Mohan, Mayank, and Madan are partners, their Partnership Deed provides for interest on drawings at 8% p.a., Mayank withdrew a fixed amount in the middle of every month and his interest on drawings amounted to ₹ 24,000 at the end of the year. What was the amount of his monthly drawings?
Ans – a) Explanation:-
Partner’s Drawing Account is closed
Ans – d) Explanation:- When Capitals are Fluctuating:- Partner’s Drawings reduce the capital. Thus Partner’s Drawings account is closed by transferring to the debit side of the Capital account. When Capitals are Fixed:- In the case of fixed capital, the…
The product method is used for the calculation of
Ans – c) Explanation:- Product Method is one of the way to calculate interest on partner’s drawings.
If the equal amount is withdrawn at the beginning of each month for personal use, the period for which interest will be charged will be
Ans – d) Explanation:- Average Month = 12 + 1/2 = 6.5 Months