Three friends started a partnership business by investing ₹ 5,00,000 each. They decided to share profits equally. name the terms, by which they will be called individually and collectively.
Answer:- Individually:- Partners Collectively:- Firm
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Ajay and Ashish contribute ₹ 1,00,000 each to run a charitable clinic. Should they enter into a Partnership Deed?
No, there is no need to enter into Partnership Deed because the activities are not in the nature of business but charity. Thus, an essential component of business that it should be carried on with the purpose to earn profits,…
How will you deal with the following items in the absence of a Partnership Deed:
Answer:- i) Interest on Capital will not be allowed (paid) ii) Interest on drawings will not be charged iii) Interest on loan from a partner will be allowed (Paid) @ 6% p.a. iv) profit/Loss will be shared equally.
Can a partner be exempted from sharing the losses in a firm? If yes, under what circumstances?
Answer:- Yes, if the Partnership Deed so provides.
Give two reasons in favour of having a Partnership Deed.
Answer:- Partnership Deed is a useful document because: i) It regulates the rights, duties, and liabilities of each partner. ii) If any dispute arises between/among the partners, then it can be settled on the basis of the Partnership Deed as…
Is it compulsory for firms to have a Partnership Deed?
Answer:- No, it is not compulsory but is preferable to have a Partnership Deed.
Aman and Boman are partners in a firm without a Partnership Deed. Aman manages the business and thus, claims salary of ₹ 18,000 per month. State with reasons whether his claim is valid or not.
Answer:- Aman’s Claim is not valid as in the absence of a partnership Deed, salary to partners is guided by the Indian Partnership Act, of 1932. The Act does not allow the payment of salary to a partner.
Suresh and Ramesh are partners in a firm with a capital of ₹ 3,00,000 and ₹ 4,00,000 respectively.
Answer:- No Ramesh’s Claim is not valid as in the absence of a partnership Deed, profit sharing is guided by the Indian Partnership Act, 1932. The act provides for sharing profits equally.
What is meant by Net Profit?
Answer:- Net Profit means profit earned by the firm from its Operating and Non-operating Activities. It is ascertained by preparing Profit and Loss Account.
What is meant by Divisible Profit?
Answer:- Divisible profit means profit remaining to be distributed between/among partners after allowing remuneration (i.e., Salary, Commission, etc.) to partners, interest on capital, transfer to reserve, and charging interest on drawings.