Archives Answers

Ans – b) Explanation:- Partnership Deed is a written agreement between the partners. Interest on the partner’s drawings is charged if the Rate of Interest is agreed upon and mentioned in the partnership deed.

Ans – c) Explanation:- It is not necessary to contribute capital to become a partner in a partnership firm.

Ans – a) Explanation:- In the case of the Fixed Capital Method. The Capital Account would always show a credit balance.

Ans – a) Explanation:- The Profit and Loss Appropriation Account is prepared to distribute Profit and loss for the year among the partners.

Ans – b) Explanation:- The relationship among the partners is of Agent and the Principal. As an agent, a partner represents other partners and thereby, binds them through his acts. As a Principal, He is bound by the act of…

Ans – c) Explanation:- In the absence of any written agreement for the Profit sharing ratio among the partners. The Provisions of partnership act 1932 is applied. Thus Profit is divided equally among the partners.

Ans – c) Explanation:- in the absence of a partnership deed, The Provisions of Indian Partnership Act 1932 is Applied. The profit is divided equally among the partners.

Ans – a) Explanation:- Current accounts are maintained when Capitals are fixed. In order to maintain fixed capital all transactions or revenue nation such as interest on capital, drawings commission salary to parters and distribution of profits are shown in…

Ans – b) Explanation:- a, c, d items belong to the partners. Only the manager’s commission belongs to other than a partner.

Ans – d) Explanation:- In the case of the Fixed Capital Method. The Capital Account of Partners can either show a credit balance or zero balance. As only ‘additional capital’ and ‘drawings out of capital’ are shown in the capital…