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.
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If the equal amount is withdrawn at the beginning of each month for personal use, the period for which interest will be charged will be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
Mohan draws ₹ 10,000 p.m. on the last day of every month for his personal use. If interest is to be charged @ 5% p.a., interest chargeable from him in the accounting year will be
Ans – b) Explanation:- Average Month = 11 + 0/2 = 5.5 Months Interest on Mohan’s Drawings = 10000 * 12 * 5% * 5.5/12 = ₹ 2750
Ram and Mohan are partners. They draw for personal use ₹ 60,000 and ₹ 40,000 respectively. Interest is chargeable @ 6% p.a. On Drawings. What is the interest on drawings?
Ans – a) Explanation:- Interest on Ram’s Drawings = 60,000 * 6% * 6/12 = ₹ 1800 Interest on Mohan’s Drawings = 40,000 * 6% * 6/12 = ₹ 1200
Partners have to pay interest on withdrawals (in cash or kind) only when provided by the
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.
Which of the following is not an essential feature of partnership?
Ans – c) Explanation:- It is not necessary to contribute capital to become a partner in a partnership firm.
Which Capital accounts with balances always show a credit balance?
Ans – a) Explanation:- In the case of the Fixed Capital Method. The Capital Account would always show a credit balance.
The profit & Loss Appropriation Account is prepared to
Ans – a) Explanation:- The Profit and Loss Appropriation Account is prepared to distribute Profit and loss for the year among the partners.
Relationship between the partners is of
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…
Mohit and Rohit were partners in a firm with capitals of ₹ 80,000 and ₹ 40,000 respectively. The firm earned a profit of ₹ 30,000 during the year. Mohit’s share in the profit will be
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.