CBSE Class 12 Accountancy Partnership Fundamentals VBQs Set 03

Question. What is not the essential feature of the partnership firm?
(a) Two or more persons.
(b) Settlement of Disputes.
(c) Agreement.
(d) Lawful Business.
Answer: (b) Settlement of Disputes.

Question. Which is not the clause of the Partnership Deed?
(a) Business can be carried on by all or any of the partner’s acting for all.
(b) Commencement of business.
(c) Rights & Duties of Partner.
(d) None of the options.
Answer: (d) None of the options.

Question. Oswal & Publisher were partner’s without any deed where Publisher invested the total capital and Oswal had the complete hold on the business as Publisher was the sleeping partner, but as Publisher invested complete capital demanded to share the profits in the Ratio of 5 : 1 and Oswal object’s to this.
(a) Oswal’s objection is correct.
(b) Publisher’s demand is correct.
(c) Both are wrong.
(d) As investment is of publisher he should be given interest on capital.
Answer: (a) Oswal’s objection is correct.

Question. The Net profits of Kala & Kand were Rs. 20,000. Gulaboo the manager was to be given the commission of Rs 6,000; the distribution of profits will be done as:
(a) Rs. 10,000 to each.
(b) Rs. 7,000 to each.
(c) Rs. 13,000 to each.
(d) None of the options.
Answer: (b) Rs. 7,000 to each.

Question. Gulab & Jamun are patners in a firm. Gulab is to get commission of 10% of net profit before charging any commission. Jamun is to get a commission of 10% on net profit after charging all commissions. Net Profit for the year ended 31st March, 2021 was Rs 55,000. What will be amount of Profit to be distributed to each?
(a) Rs. 5,500 to Gulab & Rs. 4,500 to Jamun.
(b) Rs. 27,500 each.
(c) Rs. 22,500 each.
(d) None of the options.
Answer: (c) Rs. 22,500 each.

Question. Answer and Question are partners from 1st April, 2020, without a Partnership Deed and they introduced capitals of Rs. 35,000 and Rs. 20,000 respectively. On 1st October, 2020, Answer advanced loan of Rs. 8,000 to the firm without any agreement as to interest. The Profit and Loss Account for the year ended 31st March, 2021 shows a profit of Rs. 15,000 but the partners cannot agree on payment of interest and on the basis of division of profits. What amount of profit will be distributed between them.
(a) Rs. 7,500 to each.
(b) Rs. 7,380 to each.
(c) Rs. 7,260 to each.
(d) None of the options.
Answer: (b) Rs. 7,380 to each.

Question. A, B, C, and D are partners in a firm sharing profits as 4 : 3 : 2 : 1 respectively. It earned a profit of Rs. 1,80,000 for the year ended 31st March, 2021. As per the Partnership Deed, they are to charge a commission @ 20% of the profit after charging such commission, which they will share as 2 : 3 : 2 : 3. What will be the amount of commission to be paid to the partners.
(a) Rs. 7,500 each.
(b) Rs. 6,000; Rs. 9,000; Rs. 6,000; Rs. 9,000
(c) Rs. 12,000; Rs. 9,000; Rs. 6,000; Rs. 3,000
(d) None of the options.
Answer: (b) Rs. 6,000; Rs. 9,000; Rs. 6,000; Rs. 9,000

Question. Pen and Pencil were two partners, they drew for their personal use Rs. 1,20,000 and Rs. 80,000. Interest is chargeable @ 6% p.a. on the drawings. What is the amount of interest chargeable from each partner?
(a) Rs. 7,200 to Pen; Rs. 4,800 to Pencil.
(b) Rs. 3,600 to Pen; Rs. 2,400 to Pencil.
(c) Rs. 3,900 to Pen; Rs. 2,600 to Pencil.
(d) Rs. 4,500 to Pen; Rs. 3,000 to Pencil.
Answer: (b) Rs. 3,600 to Pen; Rs. 2,400 to Pencil.

Question. Fan and Cooler are partners sharing profits equally. Fan drew regularly Rs. 4,000 at the end of every month for six months ended 30th September, 2020. Calculate interest on drawings @ 5% p.a. for a period of six months.
(a) Rs. 250
(b) 41.67
(c) Rs. 1,200
(d) None of the options.
Answer: (a) Rs. 250

Question. Lappy and Tappy are partners sharing Profit and Loss in the ratio 3 : 2 having Capital Account balances of Rs. 50,000 and Rs. 40,000 on 1st April, 2020. On 1st July, 2020, Lappy introduced Rs. 10,000 as his additional capital where-as Tappy introduced only Rs. 1,000. Interest on capital is allowed to partners @ 10% p.a. Interest on capital for the financial year ended 31st March, 2021 will be:
(a) Rs. 5,750 for Lappy & Rs. 4,075 for Tappy.
(b) Rs. 5,000 for Lappy & Rs. 4,000 for Tappy.
(c) Rs. 750 for Lappy & Rs. 75 for Tappy.
(d) None of the options.
Answer: (a) Rs. 5,750 for Lappy & Rs. 4,075 for Tappy.

Question. Eye and Boll contribute Rs. 20,000 and Rs. 10,000 respectively towards capital. They decide to allow interest on capital @ 6% p.a. Their respective share of profits is 2 : 3 and the net profit for the year is Rs. 1,500. Show distribution of profits:
(a) Rs. 1,200 to Eye; and Rs. 600 to Boll.
(b) Rs. 1,000 to Eye; and Rs. 500 to Boll.
(c) No interest will be provided.
(d) Rs. 600 to Eye; and Rs. 900 to Boll.
Answer: (d) Rs. 600 to Eye; and Rs. 900 to Boll.

Question. Sajal and Kajal are partners sharing profits and losses in the ratio of 2 : 1. On 1st April, 2018 their Capitals were: Sajal – Rs. 50,000 and Kajal – Rs. 40,000.
(i) Interest on Capital is to be allowed @ 5% p.a.
(ii) Interest on the loan advanced by Kajal for the whole year, the amount of loan being Rs. 30,000.
(iii) Interest on partners’ drawings @ 6% p.a. Drawings: Sajal Rs. 10,000 and Kajal Rs. 8,000.
(iv) 10% of the divisible profit is to be transferred to Reserve.
Net profit for the year ended 31st March, 2019 is Rs. 68,460. What amount of profit will be credited to Profit & Loss Appropriation A/c.
(a) Rs. 68,460
(b) Rs. 66,660
(c) Rs. 56,430
(d) Rs. 60,390
Answer: (d) Rs. 60,390

Question. Reya, Mona and Nisha shared profits in the ratio of 3 : 2 : 1. The profits for the last three year were Rs. 1,40,000; Rs. 84,000 and Rs. 1,06,000 respectively. These profits were by mistake shared equally to all, Journal entry for the same will be.
(a) Nisha’s Capital A/c Dr. Rs. 55,000 To Reya’s Capital A/c Rs. 55,000
(b) Reya’s Capital A/c Dr. Rs. 55,000 To Nisha’s Capital A/c Rs. 55,000
(c) Mona’s Capital A/c Dr. Rs. 1,10,000 Nisha’s Capital A/c Dr. Rs. 55,000 To Reya’s Capital A/c Rs. 1,65,000
(d) Nisha’s Current A/c Dr. Rs. 55,000 To Reya’s Current A/c Rs. 55,000
Answer: (b) Reya’s Capital A/c Dr. Rs. 55,000 To Nisha’s Capital A/c Rs. 55,000

Question. Agra, Delhi & Mathura are partners in a firm sharing profits in the ratio of 4 : 2 : 1. It is provided that Mathura’s share in profits would not be less than Rs. 3,750. Profits for the year ended 31st March, 2021 was Rs. 15,750. What amount of Deficiency will be borne by Agra.
(a) Rs. 1,000
(b) Rs. 500
(c) Rs. 750
(d) None of the options.
Answer: (a) Rs. 1,000

Question. Shola, Shabnam & Juala are partners sharing profits in the atio of 6 : 4 : 1. Juala is guaranteed a minimum profit of Rs. 20,000. The firm incurred a loss of Rs. 2,20,000 for the year ended 31st March, 2021. What amount of deficiency will be borne by Shola and Shabnam.
(a) Rs. 10,000 each.
(b) Rs. 20,000 each.
(c) Rs. 24,000 by Shola & Rs. 16,000 by Shabnam.
(d) Rs. 12,000 by Shola & Rs. 8,000 by Shabnam.
Answer: (c) Rs. 24,000 by Shola & Rs. 16,000 by Shabnam.

Question. Aalu, Tamatar & Kheera are partners in a firm sharing profits & losses in the ratio of 12 : 8 : 5. Partner Kheera is guaranteed a minimum profit of Rs. 5,000 p.a. by the firm. The Losses for the year were Rs. 20,000. What will be the amount of deficiency for Kheera.
(a) Rs. 9,000
(b) Rs. 1,000
(c) Rs. 5,000
(d) Rs. 4,000
Answer: (a) Rs. 9,000

Question. If the guarantee is given to the partner by some partners, deficiency on such will be borne by
(a) Partnership firm.
(b) All of the other partners.
(c) Partners who had given the guarantee.
(d) None of the options.
Answer: (c) Partners who had given the guarantee.

Question. Which of the following items will not be shown in the Profit & Loss Appropriation account?
(a) Interest on Loan.
(b) Interest on capital.
(c) Interest on Drawings.
(d) General Reserve.
Answer: (a) Interest on Loan.

Question. If the Partners are maintaining the capital account on Fixed basis, partner’s capital account will have:
(a) Credit balance.
(b) Debit balance.
(c) Credit or Debit balance.
(d) May have Nil balance.
Answer: (a) Credit balance.

Question. If the partnership deed is silent interest on drawings will be charged @
(a) 6% P.a
(b) 6% P.m
(c) Any other Rate.
(d) Will not be charged.
Answer: (d) Will not be charged.

Question. Assertion : X spends twice the time that Y devoted to business. X claims that he should get salary of Rs. 6,000/- p.m for extra time spent.
Reason : As there is no partnership deed Partnership Act 1932 applies and as per the Act partners will not be allowed any salary or remuneration.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Y wants that profits should be distributed in the ratio of capitals as he has invested more capital than X this dispute arises as the partnership deed was not there.
Reason : As there is no partnership deed Indian Partnership Act, 1932 applies and as per the Act, Profits are to be distributed equally.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : In case of losses interest on capital will not be provided.
Reason : As interest on capital is treated as the appropriation of the profits and there are no profits but interest on capital can be provided in case of losses if it is to be treated as charge.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (A) Both A and R true and R is the correct explanation of A.

Question. Assertion : Tanmay Academy the Institution for Commerce had 50 partners they wanted to admit Pankaj as the partner as he is very competent person to which all the partners agree, but due to the laws he was not permitted to join as the partner.
Reason : As there were 50 partners in the firm and the maximum no of partners in the firm can be 50 only as per the Rule 10 of the companies Rule, 2014. He can’t be admitted as the partner.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (A) Both A and R true and R is the correct explanation of A.

Question. Assertion : It is not essential but desirable to have a Partnership Deed.
Reason : As in the absence of the Partnership Deed the disputes can also be resolved in the court.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (A) Both A and R true and R is the correct explanation of A.

Question. Assertion : Rent paid to the partner is not to be shown in Profit & Loss Appropriation A/c .
Reason : Rent paid to the partner is treated as the charge against profit and not the appropriation of the profits.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (A) Both A and R true and R is the correct explanation of A.

Question. Assertion : Commission paid to the partner is shown in Profit & Loss Appropriation A/c
Reason : Commission paid to the partner is a charge against profit and not the appropriation of profit and hence it will be shown in Profit and Loss Account and not in Profit & Loss Appropriation A/c
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Pankaj was sleeping partner who wants to inspect the books of accounts of the firm but Ruchi another partner object to this.
Reason : As Pankaj is sleeping partner he has no right to inspect the books of accounts.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (C) A is true and R is false

Question. Assertion : At the time of the admission of partner, when Workmen Compensation Reserve appearing in the Balance Sheet was for Rs. 8,000 and the claim for Workmen was for Rs. 10,000 Revaluation Account will be debited to record the claim on Workmen Compensation by Rs. 10,000.
Reason : The Clain for Workmen Compensation will be debited by Rs. 2,000 in Revoluation Account as the reserve for the same is already for Rs. 8,000.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Capital accounts can never have the Debit balance..
Reason : If the Capital account is maintained on the Fixed Capital Account Method all the transactions related to drawings, interest on capital, Interest on drawings, salary and other are shown in Current account and Capital account will be changed only when the additional capital is introduced or the permanent capital is withdrawn.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Goodwill is Intangible Asset and not the Fictitious Asset.
Reason : As per AS 26 an Intangible Asset is an identifiable non-monetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (A) Both A and R true and R is the correct explanation of A.

Question. Assertion : Self-Generated goodwill can be recorded in the books of accounts.
Reason : As per AS 26, Intangible Asset prescribes that purchased goodwill may be recognised in the books of account and written off at the earliest but within the estimated useful life and self-generated goodwill can’t be recorded in the books .
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Quality of the product effect the goodwill
Reason : If a firm enjoys good reputation for the quality of its product, there will be a ready sale so the value of the goodwill will be high.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (A) Both A and R true and R is the correct explanation of A.

Question. Assertion : Capital employed can only by calculated by calculating: Capital + Reserves-Goodwill, if any existing in the books-Fictitious Assets-Non-Trade Investments.
Reason : Goodwill can be calculated by another mode that is: All Assets(except Goodwill, Non-Trade Investments and Fictitious Assets)-Outside Liabilities.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Excess of Actual Profit over normal profit is known as Weighted Average Profit.
Reason : Excess of Actual Profit over normal profit is known as Super Profit.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : The formula to calculate Goodwill by Super Profit Method is Super Profit × \( \frac{100}{\text{Normal Rate of Return}} \).
Reason : The formula to calculate Goodwill by Super Profit Method is Super Profit × No of Years Purchase.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Capitalised Value of average profit is calculated to calculate the goodwill by Capitalisation of Average Profit Method.
Reason : Under Capitalisation of Average Profit Method goodwill is calculated by deducting capital employed in the business from the capitalised value of average profits on the basis of Normal Rate of Return.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (A) Both A and R true and R is the correct explanation of A.

Question. Assertion : Any Abnormal Losses are deducted from the average profits to calculate the goodwill.
Reason : To calculate the Normal business profits any abnormal losses are to be added to the actual profits of the year in which the losses were there as these losses were already deducted from the profit of that year.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Purchased Goodwill means goodwill for which consideration has not been paid but is generated due to performance in the past.
Reason : Purchased Goodwill means goodwill for which consideration in money or money’s worth has been paid..
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Question. Assertion : Excess amount that a firm gets over and above the market value of assets at the time of sale of business is Reserve.
Reason : Excess amount that a firm gets over and above the market value of assets at the time of sale of business is Goodwill.
(A) Both A and R true and R is the correct explanation of A.
(B) Both A and R are true but R is not the correct explanation of A
(C) A is true and R is false
(D) A is false and R is true
Answer: (D) A is false and R is true

Navdeep will to withdrew Rs. 20000, and the rate of interest on drawing is @ 10% p.a., but he is confused at what period of year should he withdrew :

Question. What will be the rate of interest if he withdrew in the beginning of each quarter?
(a) Rs. 5,000
(b) Rs. 3,000
(c) Rs. 4,000
(d) Rs. 5,500
Answer: (a) Rs. 5,000

Question. What will be the rate of interest if he withdrew in the end of each quarter ?
(a) Rs. 5,000
(b) Rs. 3,000
(c) Rs. 4,000
(d) Rs. 5,500
Answer: (b) Rs. 3,000

Question. What will be the rate of interest if he withdrew during the middle of each quarter ?
(a) Rs. 5,000
(b) Rs. 3,000
(c) Rs. 4,000
(d) Rs. 5,500
Answer: (c) Rs. 4,000

Arun and Barun are partners in a firm sharing profits and losses. Their capitals on 1 April, 2015 were Rs. 4,80,000 and Rs. 5,40,000. On 1 October, 2015, they decided that the total capital of the firm should be Rs. 10,00,000 to be contributed equally by both of them.According to the Partnerhip Deed, interest on capital is allowed to the partners @6% p.a.

Question. You are required to compute interest on capital for the year ending 31 March, 2016.
(a) Rs. 29,400, Rs. 31,200
(b) Rs. 14,400, Rs. 16,200
(c) Rs. 15,000, Rs. 15,000
(d) None of the options
Answer: (a) Rs. 29,400, Rs. 31,200

Question. What would be the profit sharing ratio of Arun and Barun?
(a) 1 : 1
(b) 2 : 3
(c) 3 : 2
(d) 3 : 4
Answer: (a) 1 : 1

Question. What would be the interest on capital till 30 September, 2015?
(a) Rs. 29,400, Rs. 31,200
(b) Rs. 14,400, Rs. 16,200
(c) Rs. 15,000, Rs. 15,000
(d) None of the options
Answer: (b) Rs. 14,400, Rs. 16,200

Question. What would the interest on capital from 1 October, 2015 to 31 March, 2016 ?
(a) Rs. 29,400, Rs. 31,200
(b) Rs. 14,400, Rs. 16,200
(c) Rs. 15,000, Rs. 15,000
(d) None of the options
Answer: (c) Rs. 15,000, Rs. 15,000

The average Net profits expected in the future by ABC Firm are Rs. 36,000 per year. The average capital employed in the business by the firm is Rs. 2,00,000. The rate of return expected from capital invested in this class of business is 10%. The remuneration of the partners is estimated to be Rs. 6,000 per annum. Based on above information you are required to answer the following questions:

Question. What will be the Actual Average Profit?
(a) Rs. 36,000
(b) Rs. 35,000
(c) Rs. 30,000
(d) Rs. 6,000
Answer: (c) Rs. 30,000

Question. What will be the Normal Profit?
(a) Rs. 10,000
(b) Rs. 20,000
(c) Rs. 30,000
(d) Rs. 15,000
Answer: (b) Rs. 20,000

Question. Calculate Super Profit:
(a) Rs. 35,000
(b) Rs. 12,000
(c) Rs. 15,000
(d) Rs. 10,000
Answer: (d) Rs. 10,000

Question. Find out the value of goodwill on the basis of two year’s purchase of Super Profits.
(a) Rs. 20,000
(b) Rs. 22,000
(c) Rs. 24,000
(d) Rs. 23,900
Answer: (a) Rs. 20,000

On April 1, 2021 an existing firm had assets of Rs 75000 including cash of Rs. 5,000. The partner’s capital account showed a balance of Rs. 60,000 and reserve constituted the rest. If the normal rate of return is 10% and the goodwill of the firm is valued at Rs. 24,000 at 4 year’s purchase of super profits.

Question. What will be the Super Profits of the firm?
(a) Rs. 9,000
(b) Rs. 7,000
(c) Rs. 8,000
(d) Rs. 6,000
Answer: (d) Rs. 6,000

Question. Calculate Normal Profits:
(a) Rs. 6,500
(b) Rs. 7,500
(c) Rs. 8,500
(d) Rs. 8,555
Answer: (b) Rs. 7,500

Question. Calculate Net Assets:
(a) Rs. 69,000
(b) Rs. 76,000
(c) Rs. 75,000
(d) Rs. 80,000
Answer: (c) Rs. 75,000

Question. Find the Average Profits of the firm:
(a) Rs. 10,000
(b) Rs. 5,000
(c) Rs. 13,500
(d) Rs. 12,500
Answer: (c) Rs. 13,500