Accounting for Partnership Firms – Fundamentals this lesson 50 mcq with answer:--

Here is the list of Accountancy chapters for Class 12 (CBSE syllabus) for the academic year 2024-2025:

Accounting for Partnership Firms – Fundamentals this lesson 50 mcq  with answer:--

1. A partnership is formed by an agreement between:
a) Friends
b) Relatives
c) Partners
d) All of these
Answer: c) Partners

2. The minimum number of partners in a partnership is:
a) 1
b) 2
c) 3
d) 5
Answer: b) 2

3. The maximum number of partners in a partnership firm is:
a) 10
b) 50
c) 20 (for general business)
d) Unlimited
Answer: c) 20

4. Which Act governs partnership firms in India?
a) Companies Act, 2013
b) Partnership Act, 1932
c) Income Tax Act, 1961
d) None of these
Answer: b) Partnership Act, 1932

5. Partnership agreement is also known as:
a) Partnership Act
b) Memorandum of Association
c) Partnership Deed
d) None of these
Answer: c) Partnership Deed

6. In the absence of an agreement, the profit-sharing ratio among partners is:
a) 1:2
b) Equally
c) 2:3
d) Based on capital
Answer: b) Equally

7. Which account is prepared to ascertain the profit or loss of a partnership firm?
a) Profit and Loss Account
b) Revaluation Account
c) Partner’s Capital Account
d) All of these
Answer: a) Profit and Loss Account

8. The capital account of partners can be maintained under:
a) Fixed capital method
b) Fluctuating capital method
c) Both (a) and (b)
d) None of these
Answer: c) Both (a) and (b)

9. Interest on drawings is debited to:
a) Partner’s Capital Account
b) Profit and Loss Account
c) Current Account
d) Revaluation Account
Answer: a) Partner’s Capital Account

10. Interest on capital is calculated on:
a) Opening capital
b) Closing capital
c) Average capital
d) None of these
Answer: a) Opening capital

11. If the partnership deed is silent, partners are entitled to:
a) Salary
b) Commission
c) Interest on capital
d) None of these
Answer: d) None of these

12. In the absence of an agreement, interest on capital is allowed at:
a) 6% p.a.
b) 5% p.a.
c) No interest is allowed
d) 8% p.a.
Answer: c) No interest is allowed

13. Partners are personally liable for:
a) Firm's debts
b) Individual debts
c) Both
d) None
Answer: a) Firm's debts

14. If a partner withdraws ₹5,000 per month, the total drawings in a year would be:
a) ₹50,000
b) ₹60,000
c) ₹70,000
d) ₹80,000
Answer: b) ₹60,000

15. Which account is prepared when there is a change in the value of assets and liabilities?
a) Revaluation Account
b) Profit and Loss Account
c) Balance Sheet
d) None of these
Answer: a) Revaluation Account

16. The liability of a partner in a partnership firm is:
a) Unlimited
b) Limited to capital contribution
c) Zero
d) Based on profit-sharing ratio
Answer: a) Unlimited

17. The amount withdrawn by partners for personal use is recorded in:
a) Capital Account
b) Drawings Account
c) Current Account
d) Loan Account
Answer: b) Drawings Account

18. In the case of fluctuating capital, interest on capital is credited to:
a) Capital Account
b) Current Account
c) Drawings Account
d) Revaluation Account
Answer: a) Capital Account

19. Which of the following is not a feature of a partnership?
a) Unlimited liability
b) Separate legal entity
c) Mutual agency
d) Agreement between partners
Answer: b) Separate legal entity

20 .Profit and Loss Appropriation Account is:
a) A nominal account
b) A personal account
c) A real account
d) None of these
Answer: a) A nominal account

21.hat is the primary motive of a partnership business?
a) To serve society
b) To earn profit
c) To promote charity
d) To create employment
Answer: b) To earn profit

22.Which account is prepared to allocate net profit among partners?
a) Profit and Loss Account
b) Profit and Loss Appropriation Account
c) Revaluation Account
d) None of these
Answer: b) Profit and Loss Appropriation Account

23.If the deed is silent about interest on drawings, it is charged at:
a) 6% p.a.
b) 5% p.a.
c) 10% p.a.
d) No interest is charged
Answer: d) No interest is charged

24.When partners’ capitals are fixed, drawings are debited to:
a) Capital Account
b) Current Account
c) Revaluation Account
d) None of these
Answer: b) Current Account

25.Which of the following is not recorded in the capital account under the fixed capital method?
a) Interest on capital
b) Drawings
c) Additional capital introduced
d) Salary to partners
Answer: b) Drawings

26.Which of the following is credited to the partner’s capital account?
a) Salary to a partner
b) Interest on drawings
c) Loss on revaluation
d) Partner’s drawings
Answer: a) Salary to a partner

27.Mutual agency means:
a) Partners act as agents of the firm and of each other
b) Partners act as agents only of the firm
c) Partners are not agents
d) None of these
Answer: a) Partners act as agents of the firm and of each other

28.If a partner is guaranteed a minimum profit, the deficiency is borne by:
a) All partners equally
b) The guaranteeing partner(s)
c) The firm
d) None of these
Answer: b) The guaranteeing partner(s)

29.Which of these items is not an appropriation of profit?
a) Interest on capital
b) Partner's salary
c) Partner's drawings
d) Commission to a partner
Answer: c) Partner's drawings

30.Goodwill is generally valued at the time of:
a) Admission of a partner
b) Retirement of a partner
c) Dissolution of the firm
d) All of these
Answer: d) All of these

31.In a partnership firm, profits are shared:
a) Equally unless otherwise agreed
b) In proportion to capital contributions
c) Based on seniority
d) None of these
Answer: a) Equally unless otherwise agreed

32.Interest on drawings is:
a) An income for the firm
b) An expense for the firm
c) Credited to Profit and Loss Account
d) Both (a) and (c)
Answer: d) Both (a) and (c)

33.Which of the following is a fixed obligation for the firm?
a) Partner’s salary
b) Partner’s commission
c) Interest on partner’s loan
d) Interest on capital
Answer: c) Interest on partner’s loan

34.Which of the following methods is not used for goodwill valuation?
a) Average Profit Method
b) Weighted Average Profit Method
c) Annuity Method
d) Profit Volume Ratio Method
Answer: d) Profit Volume Ratio Method

35.The profit-sharing ratio in the absence of an agreement is:
a) Based on capital contribution
b) 3:2
c) 1:1
d) None of these
Answer: c) 1:1

36.Which account is debited for interest on a partner's loan?
a) Partner’s Capital Account
b) Profit and Loss Account
c) Revaluation Account
d) None of these
Answer: b) Profit and Loss Account

37.Drawings by a partner are:
a) Credited to the firm's account
b) Debited to the firm's account
c) Debited to the partner's account
d) None of these
Answer: c) Debited to the partner's account

38.Which method maintains the capital accounts unchanged except for additional capital or withdrawals?
a) Fluctuating Capital Method
b) Fixed Capital Method
c) Average Profit Method
d) None of these
Answer: b) Fixed Capital Method

39.In the absence of an agreement, interest on loans given by partners is allowed at:
a) 5% p.a.
b) 6% p.a.
c) 10% p.a.
d) No interest is allowed
Answer: b) 6% p.a.

40.Capital employed in a partnership business is the total of:
a) Fixed assets only
b) Current assets and liabilities
c) Partner's capital and reserves
d) None of these
Answer: c) Partner's capital and reserves

41.Which of the following is not true for a partnership?
a) It is formed by an agreement
b) It is governed by the Companies Act
c) It involves profit-sharing
d) It involves mutual agency
Answer: b) It is governed by the Companies Act

42.A partner contributes ₹1,00,000 as a loan to the firm. Interest payable is:
a) ₹5,000
b) ₹6,000
c) ₹10,000
d) None of these
Answer: b) ₹6,000

43.A partner's salary is shown in:
a) Profit and Loss Account
b) Profit and Loss Appropriation Account
c) Revaluation Account
d) Capital Account
Answer: b) Profit and Loss Appropriation Account

44.If a partner's capital increases, the credit goes to:
a) Drawings Account
b) Profit and Loss Appropriation Account
c) Partner’s Capital Account
d) Revaluation Account
Answer: c) Partner’s Capital Account

45.The amount brought in by a new partner is called:
a) Profit
b) Goodwill
c) Capital contribution
d) Loan
Answer: c) Capital contribution

46.Which method shows both fixed and current accounts separately?
a) Fixed Capital Method
b) Fluctuating Capital Method
c) Goodwill Valuation Method
d) None of these
Answer: a) Fixed Capital Method

47.Interest on drawings is:
a) An asset to the firm
b) An expense for the partner
c) A liability for the firm
d) None of these
Answer: b) An expense for the partner

48.Revaluation account is prepared to:
a) Adjust capital
b) Record changes in assets and liabilities
c) Distribute profits
d) All of these
Answer: b) Record changes in assets and liabilities

49.Which is credited to a partner’s capital account?
a) Goodwill written off
b) Partner's drawings
c) Share of profit
d) Loss on revaluation
Answer: c) Share of profit

50.The term "unlimited liability" means:
a) Partners are not liable for losses
b) Partners’ liability extends to their personal assets
c) Limited liability of partners
d) None of these
Answer: b) Partners’ liability extends to their personal assets