Interest on Capital is allowed on
Ans – a) Explanation:- Interest is allowed on the opening capital of the partners.
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The feature of a Partnership Firm is
Ans – d) Explanation:- A partnership, thus, is a business relationship between/among two or more persons to share profits and losses of the business, carried on by all or any of them acting for all.
In the absence of a Provision in the partnership deed, In which ratio is the deficiency arising out of the guarantee of profit to a partner borne by the other partners.
In the absence of a partnership Deed, the deficiency arising out of guarantee of profit to a partner is borne by other partners in their old profit sharing ratio. For example:- There are 3 partners A, B and C sharing…
If the partner’s capitals are fixed, in which account interest charged on drawings will be credited?
In Case of Fixed Capital Method. The interest on drawings are debited to partners current account. In the Fixed Capital Method, All Transactions of Revenue (Current) Nature are recorded in separate account called current account. Note:- Current transactions refers to…
What is meant by ‘unlimited liability of a partner’?
Liability of partners is unlimited, i.e., Firm’s liabilities can be paid from their personal assets. Liability of Partners is unlimited. It means that partners are liable for firm’s debts individually and jointly with other partners. Net Private Assets of a…
Explain briefly the meaning of a guarantee of minimum profit.
A Partner (or partners) may be guaranteed minimum share of profit from the business. It is the minimum profit that the guaranteed partner (or Parnters0 will get. Thus, if the guaranteed partner’s share of profit is more than the guaranteed…
Give the average period, in months, for charging interest on drawings of a fixed amount, withdrawn at the beginning of each quarter.
Average Month would be 12 + 3/2 = 7.5 Months For example A withdraw ₹ 2,000 at the begening of each quarter. The rate of interest @ 10% p.a. is charged on drawings. A’s interest on drawings would be as…
Amit, a partner in a partnership firm, withdrew ₹ 7,000 at the beginning of each quarter. For how many months would interest on drawings be charged?
Average Months in case of drawings withdrawn at the beginning of each quarter. 12 + 3/2 = 7.5 Months. Interest on Amit’s drawing would be as follows:- 7000 * 4 * rate of interest * 7.5/12 =
Under what Circumstances Average Method of calculating interest on drawings is applied?
The average Method to calculate interest on drawings is used in the following two conditions. a) The amount of drawings is uniform; and b) the time interval between the two drawings is also uniform.
What is Profit and Loss Appropriation Account
The profit & Loss Appropriation Account is an extension of the Profit and Loss Account. Net Profit for the year, as per the Profit and Loss Account is transferred to the credit of the Profit & Loss Appropriation Account. It…