1.

Partnership is defined as “the relation between persons who have agreed to (C) Partnership deed is registered in the court of law whereas partnership
share the profits of a business carried on by ____ acting for all”. agreement is not registered.
(A) All (B) Any of them (D) Partnership deed is not subject to changes unless all partners agrees to it.
(C) (A) or (B) (D) (A) and (B)
9. The name under which the business of partnership is carried on is
2. If a firm prefers Partners Capital A/c to be shown at the amount introduced called –
by the partners as capital in firm then entries for salary, interest, drawings, (A) Firm (B) Firm name (C) Partnership (D) Partner
interest on capital and drawings and profits are made in –
(A) Trading A/c (B) Profit & Loss A/c 10. If partners maintain both fixed capital and current accounts, which of
(C) Balance Sheet (D) Partners Current A/c the following would normally be credited to a partner’s capital
account?
3. Persons who have entered into partnership with one another are individually (A) Goodwill being written off (B) Losses on revaluation
known as – (C) Interest on capital (D) Profits on revaluation
(A) Co-owner’s (B) Firm (C) Partnership (D) Partner
11. To form partnership there must be agreement between at least –
4. In normal trading circumstances, which of the following would not be found (A) Three persons (B) Two persons (C) Four persons (D) None of the above
in a partner’s current account?
(A) Drawings (B) Goodwill (C) Salaries (D) Interest on drawings 12. A partner acts as ‘................’ for a firm.
(A) Agent (B) Third Party (C) Employee (D) None of the above.
5. Following are the essential elements of a partnership firm except: –
(A) At least two persons. 13. Maximum number of persons for a valid partnership for banking
(B) There is an agreement between all partners. business is –
(C) Equal share of profits and losses. (A) 15 (B) 20 (C) 25 (D) 50
(D) Partnership agreement is for some business.
14. A debit balance on a partner’s current account must indicate that: –
6. Persons who have entered into partnership with one another are collectively (A) They have a credit balance on their capital account
a called as – (B) They have withdrawn more than they have earned in the partnership
(A) Firm (B) Firm name (C) Partnership (D) Partner (C) They are insolvent
(D) Drawings are higher than the profit share for that year
7. The correct double entry to record interest on drawings is: –
Debit Credit 15. The relationship between persons who have agreed to share the profit
(A) Capital A/c P & L Appropriation A/c of a business carried on by all or any of them acting for all is known as
(B) P & L Appropriation A/c Current A/c (A) Partnership (B) Joint Venture
(C) Current A/c P & L Appropriation A/c (C) Association of Persons (D) Body of Individuals
(D) P & L Adjustment A/c Current A/c
16. The maximum number of persons permissible for a valid partnership
8. Following is the difference between partnership deed and partnership for doing any business other than banking business is –
agreement: – (A) 15 (B) 50 (C) 25 (D) 10
(A) Partnership deed is in writing and partnership agreement is oral.
(B) Partnership deed is signed by all the partners but partnership agreement is signed
by majority of the partners.

Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL Page 1

17. Features of a partnership firm is/are: – (C) Debited to Profit & Loss Appropriation A/c
(A) Two or more persons carrying common business under an agreement. (D) Credited to Revaluation A/c
(B) Sharing profits and losses in the fixed ratio.
(C) Business carried by all or any of them acting for all. 27. Partners are suppose to pay interest on drawing only when __ by the __
(D) All of the above (A) Provided, Agreement
(B) Permitted, Investors
18. In normal trading circumstances, which of the following would not be found (C) Agreed, Partners.
in a Partner’s Capital A/c? (D) Both (A) & (C)
(A) Goodwill (B) Drawing (C) Profit on revaluation (D) Losses on dissolution
28. In partnership under fixed capital account method, which of the
19. Which of the following is/are essential feature of partnership? following account is opened?
(A) Association of two or more persons (B) Agreement/contract (A) Partner’s Capital Account (B) Partner’s Current Account
(C) Carrying on business (D) All of above (C) (A) or (B) (D) (A) & (B)

20. In the absence of an agreement, partners are entitled to – 29. When a partner is given Guarantee by the other partner, loss on such
(A) Salary (B) Commission guarantee will be borne by –
(C) Interest on loan and advances (D) Profit share in capital ratio (A) Partnership firm. (B) All the other partners.
(C) Partner who gave the guarantee. (D) Partner with highest profit sharing
21. Partnership can be formed for the purpose of carrying – ratio.
(A) Charitable activities (B) Social activities (C) Business (D) All of above
30. The written agreement of partnership is most commonly referred to as:
22. Partnership type of business is formed by the mutual agreement of partners. (A) Partnership Agreement (B) Partnership Deed
What kind of agreement is it? (C) Partnership Contract (D) Partnership Act
(A) Oral agreement (B) Written agreement
(C) Oral or written agreement (D) None of them 31. In partnership under fixed capital account method, recording the
transactions relating to drawings, interest on capital, commission,
23. Which of the following is conclusive evidence of partnership – salary, share of profit or loss are made in –
(A) Sharing of profits (B) Mutual agency (A) Partner’s Capital Account (B) Partner’s Current Account
(C) Carrying of some business (D) All of above (C) Revaluation Account (D) Profit & Loss Adjustment Account

24. Interest on capital will be paid to the partners if provided for in the 32. Guarantee given to a Partner A by the other Partners B & C means –
agreement but only from – (A) In case of loss A will contribute towards that loss.
(A) Current Profits (B) Reserves (C) Accumulated Profits (D) Goodwill (B) In case of insufficient profits A will receive only the share of profit and not
minimum guaranteed amount.
25. The capital account of a partner may be a – (C) In case of loss or insufficient profits A will withdraw the minimum
(A) Fixed Capital A/c (B) Fluctuating Capital A/c guaranteed amount.
(C) (A) or (B) (D) None of the above (D) All of the above.

26. Interest on drawings is: –

(A) Debited to Partner’s Current A/c
(B) Credited to Partner’s Current A/c

Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL Page 2

33. In partnership under fluctuating capital account method, recording the 39. If there is no partnership deed or if there is no provision in it indicating
transactions relating to drawings, interest on capital, commission, salary, a contrary intention, partners share profits and losses –
share of profit or loss are made in – (A) In their capital ratio (B) In their opening capital ratio
(A) Partner’s Capital Account (C) Equally (D) In last agreed capital ratio
(B) Partner’s Current Account
(C) (A) or (B) 40. Profit & Loss Appropriation A/c is prepared –
(D) (A) & (B) (A) For Proprietorship firm. (B) For partnership firm
(C) Both (A) & (B) (D) None of the above
34. Which of the following entry will be passed for providing partner’s salary?
(A) P & L Appropriation A/c Dr. 41. If there is no partnership deed or if there is no provision in it indicating
To Partners Salary A/c a contrary intention and where a partner has advanced any loan to the
(B) Partners Salary A/c Dr. firm and the agreement provides for interest, but does not specify any
To Partners Capital A/c rate, the rate shall be –
(C) Partners Salary A/c Dr. (A) 10% p.a. (B) 8% p.a. (C) 6% p.a. (D) 12% p.a.
To Partners Current A/c
(D) Partners Current A/c Dr. 42. Which of the following entry will be passed for recording interest on
To P & L Appropriation A/c partner’s drawings?
(A) P & L Appropriation A/c Dr.
35. What would be the profit sharing ratio if the partnership act is complied To Interest on Drawing A/c
with? (B) Interest on Drawing A/c Dr.
(A) As per agreement (B) Equal (C) Capital Ratio (D) None of the above. To Revaluation A/c
(C) Profit & Loss A/c Dr.
36. If there is no partnership deed or if there is no provision in it indicating a To Interest on Drawing A/c
contrary intention ___ has a right to take part in the conduct of the business (D) Interest on Drawing A/c Dr.
of the firm and also the right of free access to all records, books and To P & L Appropriation A/c
accounts of the firm.
(A) Working partner (B) Every partner 43. If there is no partnership deed or if there is no provision in it indicating
(C) Sleeping partner (D) Partner by estoppels a contrary intention, __ is to be charged on drawings
(A) 6% p.a. (B) No interest (C) 12% p.a. (D) 10% p.a.
37. Would interest on loan be allowed in the absence of any agreement or when
partnership deed is silent? 44. Where will you record interest on drawings?
(A) No interest allowed. (A) Debit side of Profit & Loss Appropriation A/c.
(B) Allowed only if agreed by all the other partners. (B) Credit side of Profit & Loss Appropriation A/c.
(C) Will be paid only when there are sufficient profits. (C) Credit side of Profit & Loss A/c.
(D) Allowed @ 6% p.a. (D) Credit side of Capital or Current A/c only.

38. Salary of a partner is – 45. In absence of specific provisions in the partnership deed ………….
(A) Debited to Partners Capital A/c salary would be paid to the partners
(B) Credited to Profit & Loss Appropriation A/c (A) Rs.10,000 p.m. (B) Rs.10,000 p.a. (C) Rs.20,000 p.a. (D) No
(C) Credited to Partner’s Current A/c
(D) Credited to Revaluation A/c

Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL Page 3

46. Partners drawing appears on –
(A) Debit side of Profit & Loss Appropriation A/c
(B) Credit side of Partners Capital A/c
(C) Debit side of Partners Current A/c
(D) Credit side of Partners Current A/c
47. What balance does a Partner’s Current Account has?
(A) Debit balance (B) Credit balance
(C) Either (A) or (B) (D) None of the above
48. Is rent paid to a partner is appropriation of profits?
(A) Yes (B) No
(C) If partner’s contribution as capital is maximum
(D) If partner is a working partner?
49. Interest on partners capital is chargeable –
(A) To the extent of available profit
(B) Where there is loss
(C) Fully chargeable even if profit is not sufficient
(D) None of the above
50. How would you close the Partner’s Drawings Account?
(A) By transfer to Capital or Current A/c debit side.
(B) By transfer to Capital A/c credit side.
(C) By transfer to Current A/c credit side.
(D) Either (B) or (C)
51. Interest on drawing appears on –
(A) Debit side of Profit & Loss Appropriation A/c
(B) Credit side of Partners Capital A/c
(C) Debit side of Partners Current A/c
(D) Credit side of Partners Current A/c
52. Partnership profit & loss sharing must be based on –
(A) Capital contributions
(B) Partners may agree to any profit-and-loss sharing method they desire
(C) A stated fraction (D) Service to the partnership
53. When a partner draws a fixed sum at the beginning of each month, interest
on total drawings will be equal to interest of ___ at an agreed rate.
(A) 2.5 months (B) 5.5 months (C) 6.5 months (D) 6 months
Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL
54. Following are the differences between Capital A/c & Current A/c
except:
(A) Capital Account is prepared under fixed capital method whereas current
account is prepared under fluctuating capital method.
(B) In capital account only capital introduced and withdrawn is recorded, all
other transactions between the firm and partner is recorded in the current
account.
(C) Interest is sometimes paid on capital account balance but no such
interest is payable on current account balances.
(D) (B) and (C) above.
55. Interest on capital is –
(A) Charge against profit (B) Appropriation of profit
(C) Contingent profit (D) None of the above
56. When a partner draws a fixed sum at the middle of each month,
interest on total drawings will be equal to interest of __ at an agreed
rate.
(A) 2.5 months (B) 5.5 months (C) 6.5 months (D) 6 months
57. Following are the differences between partnership & joint venture
except:
(A) Joint venture is essentially planned for short term mainly for one
contract. However, partnerships are normally undertaken as going concerns
and are expected to last for a very long period.
(B) The persons involved in a joint venture are called co-venturers whereas
persons involved in a partnership are called partners.
(C) Any specific statute of the Government does not govern joint ventures
but the Indian Partnership Act, 1932, governs partnerships.
(D) Memorandum of Understanding is mandatory to be drafted to spell the
relationship between the co-venturers whereas the basic relationship
between the partners is defined by the partnership deed.
58. Interest on capital is –
(A) Always chargeable even if there is loss
(B) Chargeable even if profit is inadequate
(C) Chargeable to the extent of available surplus
(D) Chargeable to through partner’s capital account in case of loss.
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59. When a partner draws a fixed sum at the end of each month, interest on
total drawings will be equal to interest of __ at an agreed rate.
(A) 2.5 months (B) 5.5 months (C) 6.5 months (D) 6 months
60. Partners drawing appears on –
(A) Debit side of Profit & Loss Appropriation A/c
(B) Credit side of Partners Capital A/c
(C) Debit side of Partners Current A/c
(D) Credit side of Partners Current A/c
61. Interest on partner’s loan is –
(A) Appropriation of profit
(B) Charge against profit
(C) Profit in suspense
(D) Revenue for the firm
. PRACTICAL MCQ
62. Z, a partner withdraws the following sums during the year ended
31st March 2015: On 1st May 2014 Rs.1,000 On 1st August 2014 Rs.3,000
On 1st January 2015 Rs.2,000 On 1st March 2015 Rs.1,000 Calculate
interest on his drawing @ 6% p.a.
(A) Rs.310 (B) Rs.210 (C) Rs.410 (D) Rs.510
63. B & M are partners sharing profits & losses in the ratio of 3:2 having the
capital of Rs.80,000 & Rs.50,000. They are entitled to 9% p.a. interest on
capital before distributing the profits. During the year firm earned Rs.7,800
after allowing interest on capital. Profits apportioned among B & M is: –
(A) Rs.4,680 & Rs.3,120
(B) Rs.4,800 & Rs.3,000
(C) Rs.5,000 & Rs.2,800
(D) None of the above.
64. On 1st April 2010, A’s capital account showed a balance of Rs.1,75,000 while
B’s capital account showed a balance of Rs.35,000. In 2010-2011 the firm
earned a profit of Rs.52,500 before adjustment for salary to B amounting to
Rs.10,500 for the year and interest on capital @ 7% per annum. On final
distribution of profit in profit sharing ratio of 3:2 A and B will be get share
of profit –
Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL
(A) 10,920 & 16,380 (B) 16,380 & 10,920
(C) 28,630 & 23,870 (D) 25,200 & 16,800
65. N, S & Z are partners. They withdraws fixed sum of Rs.2,000 per
month as follows. N draws at the beginning of the each month, S
withdraws at the middle of each month and Z withdraws at the end of
each month. Rate of interest on drawings is 8% p.a. Interest on drawing
for 3 partner’s respectively will be –
(A) 87, 80 & 73 (B) 1,040, 960 & 880
(C) 880, 960 & 1,040 (D) 867, 800 & 733
66. H & S are in partnership sharing profits in a 3:2 ratio. Net profit for
the year ended 31-12-2015 was Rs.12,000. Interest on capital was
allocated as Rs.400 to H and Rs.250 to S. S received a partnership
salary of Rs.5,000. How much was H’s share of profit?
(A) Rs.3,810 (B) Rs.2,540 (C) Rs.3,060 (D) Rs.4,950
.
67. N & Z are two partners. During the year N withdraws Rs.37,000 on
1-5-2012 & Z withdraws Rs.45,000 on 15-8-2012. Accounts are closed
on 31-12-2012. Rate of interest on drawings is 10% p.a. Interest on
drawing for two partner respectively will be –
(A) 2,775 & 2,063 (B) 2,063 & 2,775 (C) 2,467 & 1,688 (D) 1,688 & 2,467
68. R & S are partners with the capital of 25,000 and 15,000 respectively.
Interest payable on capital is 10% p.a. Find the interest on capital for
both the partners when the profits earned by the firm is 2,400.
(A) 2,500&1,500 (B) 1,500& 900 (C) 1,200&1,200 (D) None of the above.
69. N, S & Z are partners. They withdraws fixed sum of 15,000 per quarter
as follows. N draws at the beginning of the each quarter, S withdraws at
the middle of each quarter and Z withdraws at the end of each quarter.
Rate of interest on drawings is 12% p.a. Interest on drawing for three
partner respectively will be –
(A) 11,700, 10,800 & 9,900 (B) 975, 900 & 825
(C) 2,700, 3,600 & 4,500 (D) 4,500, 3,600 & 2,700
70. H & B are in a partnership. There net profit for the year was Rs.45,000.
Interest on capital was Rs.250 for H & Rs.375 for B. H was also entitled
to a salary of Rs.5,000 p.a. If B is entitled to 2/5 of any residual profits,
then his share of the profits for the year would be: –
(A) Rs.15,750 (B) Rs.26,625 (C) Rs.17,750 (D) Rs.23,625
Page 5
71. S & G are partners sharing profits and losses in the ratio 4:1. M was
manager who received the salary of Rs.4,000 p.m. in addition to a
commission of 5% on net profits after charging such commission. Profits for
the year is Rs.6,78,000 before charging salary. Find the total remuneration 77. X, Y & Z are partners. X withdraws fixed some at the beginning of
of M.
(A) Rs.78,000 (B) Rs.88,000 (C) Rs.87,000 (D) Rs.76,000
72. X & Y are two partners with a capital of 60,000 & 40,000 respectively. They
are allowed interest @ 10% p.a. on capital. Find the interest allowed to X
and Y.
(A) 2,000 & 3,000 (B) 4,000 & 6,000
(C) 3,000 & 2,000 (D) 6,000 & 4,000
73. X, Y & Z are partners in a firm. At the time of division of profit for the year
there was dispute between the partners. Profits before interest on partner’s
capital was Rs.6,000 and X wanted interest on capital @ 20% as his capital
contributions was Rs.1,00,000 as compared to that of Y and Z which was
Rs.75,000 and Rs.50,000 respectively.
(A) Profits of Rs.6,000 will be distributed equally with no interest on either
Capital.
(B) X will get the interest of Rs.20,000 and the loss of Rs.14,000 will be shared 79. X, Y and Z are partners in a firm. Profits before interest on partner’s
equally.
(C) All the partners will get interest on capital and the loss of Rs.39,000 will be
shared equally.
(D) None of the above.
(A) Rs.3,750 and Rs.2,250 (B) Rs.1,800 and Rs.1,800
(C) Rs.2,250 and Rs.1,350 (D) None of the above
each month. Rate of interest on drawing is 10% p.a. Interest on
drawing credited to Profit & Loss Appropriation A/c is Rs.650.
Calculate the monthly drawing of partner X.
(A) Rs.1,550 per month (B) Rs.1,200 per month
(C) Rs.1,000 per month (D) Rs.1,150 per month
78. X, Y & Z are partners in a firm. At the time of division of profit for the
year there was dispute between the partners. Profits before interest on
partner’s capital was Rs.6,000 and Y determined interest @ 24% p.a.
on his loan of Rs.80,000. There was no agreement on this point.
Calculate the amount payable to X, Y and Z respectively.
(A) Rs.2,000 to each partner.
(B) Loss of Rs.4,400 for X and Z & Y will take home Rs.14,800.
(C) Rs.400 for X, Rs.5,200 for Y and Rs.400 for Z.
(D) Rs.2,400 to each partner.
capital was Rs.12,000. Y demanded interest @ 15% p.a. on his loan of
Rs.1,60,000. Partnership deed is silent on this point. Calculate the
amount of interest payable to Y on his loan.
(A) 24,000 (B) 9,600 (C) 12,000 (D) 16,000

74. X, Y & Z are partners. Z withdraws fixed some at the end of each month. 80. X, Y & Z are partners in a firm. At the time of division of profit for the
Rate of interest on drawing is 8% p.a. Interest on drawing credited to Profit year there was dispute between the partners. Profits before interest on
& Loss Appropriation A/c is Rs.880. Calculate the monthly drawing of partner’s capital was Rs.6,000 & Z demanded minimum profit of
partner X. Rs.5,000 as his financial position was not good. However, there was no
(A) Rs.2,000 per month (B) Rs.2,200 per month written agreement. Profits to be distributed to X, Y and Z will be –
(C) Rs.2,400 per month (D) Rs.2,500 per month (A) Other partners will pay Z the minimum profit and will suffer loss
equally.
75. A has Rs.30,000 capital in the beginning of the year and introduces (B) Other partners will pay Z the minimum profit and will suffer loss in
Rs.10,000 during the year. If rate of interest on capital is 20% p.a., interest capital ratio.
on A’s capital is – (C) X & Y will take Rs.500 each and Z will take Rs.5,000.
(A) 7,000 (B) 8,000 (C) 9,000 (D) 10,000 (D) Rs.2,000 to each of the partners.

76. R & S are partners with the capital of Rs.37,500 and Rs.22,500 respectively.
Interest payable on capital is 10% p.a. Find the interest on capital for both
the partners when the profits earned by the firm is Rs.3,600.

Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL Page 6

81. X & Y are in partnership sharing profit & losses in 3:2 ratio. They provide  25% of net profit (after charging all the above provision) should be
the following information: transferred to Reserve Fund.
Particulars X Y Profit for the year was Rs.60,000. Divisible profit after above
Capital A/cs (01.01.2015) 50,000 40,000 adjustment will be –
Current A/cs (01.01.2015) Cr. 1,000 Dr. 1,000 (A) 34,091 (B) 33,056 (C) 44,091 (D) 44,555
Drawings 5,000 4,000
Salaries 6,000 4,000 86. A & B start business on 1-1-2009, with capitals of Rs.30,000 and
Commission - 5,000 Rs.20,000. According to the partnership deed, B is entitled to a salary of
Share of profit 12,000 8,000 Rs.500 per month and interest is to be allowed on capitals at 6% p.a.
Interest on capital 5,000 4,000 Profit sharing ratio is 5:3. During the year the firm earned a profit,
Interest on drawings 250 200 before charging salary to B and interest on capital amounting to
Rs.25,000. During the year A withdrew Rs.8,000 and B withdrew
If partners capital accounts are maintained under fluctuating accounts Rs.10,000 for domestic purposes. Closing balance of partners capital
method then closing balance of X & Y Capital A/c will be …….. account for A =? & B =?
(A) Rs.67,750 & 56,800 (B) Rs.68,750 & 55,800 (A) 33,800 & 23,200 (B) 23,200 & 33,800
(C) Rs.19,750 & 15,800 (D) Rs.18,750 & 15,800 (C) 41,800 & 33,200 (D) 33,200 & 41,800

82. R & S are partners with the capital of Rs.2,40,000 & Rs.1,20,000. Interest 87. X, Y & Z commence a business in partnership. X puts in Rs.20,000 for
payable on capital is 10% p.a. Profits before interest on partner’s capital
was Rs.12,000. Calculate the interest on capital for both the partners.
(A) 12,000 & 6,000 (B) 8,000 & 4,000 (C) 6,000 & 12,000 (D) 10,000 & 5,000
83. X, Y & Z are partners in a firm. Net profit was 40,000. X is entitled 50% of
the 1st Rs.20,000, Y to 40% and Z to 10%, over that amount profits are
shared equally. Y’s share of profit will be –
(A) Rs.13,333 (B) Rs.11,333 (C) Rs.14,667 (D) Rs.7,337
84. According to the partnership deed of A & B, B is entitled to a salary of 500
per month. Profit sharing ratio is 5:3.During the year the firm earned a
profit,before charging salary to B 25,000. Calculate share of profit of A & B.
(A) 13,750 & 8,250 (B) 13,875 & 7,875 (C) 10,000 & 6,000 (D) 11,875 & 7,125
85. X, Y & Z are partners in a firm with capitals of Rs.50,000; Rs.30,000 &
Rs.20,000. Their drawings are: X – Rs.10,000, Y – Rs.5,000 & Z – Rs.5,000. 89. B & M are partners sharing profits and losses in the ratio of 3:2 having
All the drawings are made during middle of the year. As per partnership
deed:
 Interest on capital & drawing is charged at 5% & 10% respectively.
 Each partner is entitled salary of Rs.2,000 p.a.
 Y is entitled to a commission @ 10% on net profit (after charging above
provisions) and after charging his commission.
the whole year. Y introduced Rs.30,000 and increases it Rs.40,000 at the
end of four months but withdraws Rs.10,000 at the end of eight month.
Z brings Rs.50,000 at first, but withdraws Rs.15,000 at the end of six
months. Calculate the profit sharing ratio based on effective capital.
(A) 24:40:51 (B) 41:22:54 (C) 6:4:3 (D) 17:13:8
88. P & Q started business with capital of Rs.70,000 and Rs.42,000 on
1st January, 2012. Q is entitled to a salary of Rs.560 p.m. Interest is
allowed on capitals and is charged on drawings at 6% p.a. Profits are to
be in ratio of 3:2. During the middle of the year, P withdrew Rs.11,200
and Q withdrew Rs.14,000. The profit for the year before appropriation
came to Rs.42,000. Calculate share of profit of A & B.
(A) 10,470 & 10,470 (B) 12,564 & 8,376
(C) 8,376 & 12,564 (D) 17,590 & 11,726
the capital of Rs.40,000 and Rs.25,000 respectively. They are entitled to
9% p.a. interest on capital before distributing the profits. During the
year firm earned Rs.3,900 after allowing interest on capital. Profits
apportioned among B and M is ……………
(A) Rs.2,340 and Rs.1,560 (B) Rs.2,340 and Rs.1,500
(C) Rs.2,500 and Rs.1,400 (D) None of the above

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90. S & G are partners sharing profits & losses in the ratio 4:1. M was manager Rohit & Rahul remaining unaltered. Before becoming a partner,
who received the salary of Rs.1,000 p.m. in addition to a commission of Rohan was getting salary of Rs.5,000 p.m. together with a commission
5% on net profits after charging such commission. Profits for the year is of 4% on the net profits after deducting his salary and commission. It is
Rs.1,69,500 before charging salary. Find the total remuneration of M. provided in the partnership deed that the share of Rohan profits as a
(A) 19,500 (B) 22,000 (C) 21,750 (D) 19,000 partner in excess of the amount to which he would have been entitled if
he had continued as the chief clerk, should be taken out of Rohit’s
91. X, Y & Z are partners sharing profits & losses in the ration of 3:3:2. Each share of profits. Net profit for year ended 31-12-2014, amounts to be
partner withdraws as follows: X had withdrawn Rs.15,000 on 15-6-2015. Rs.11,00,000. Rohit’s share of profit will be ………
Y had withdrawn Rs.8,500 on 1-5-2015 & 10,000 on 15.10.2015. Z had (A) 6,00,000 (B) 4,00,000 (C) 1,10,000 (D) 5,00,000
withdrawn Rs.2,500 at the end of each month. Rate of interest on drawing is
9%. Accounting year ends on 31st December each year. Calculate the 95. A & B are sharing profits & losses in the ratio 3:2. In appreciation of
interest on drawings. the service of clerk C, who was in receipt of a salary of Rs.2,400 p.a.
(A) 731.25, 697.5 & 1,237.5 (B) 675, 510 & 1,327.5 and a commission of 5% on the net profit after charging such salary
(C) 657, 679.5 & 1,237.5 (D) 567, 796.5 & 1,732.5 and commission, they took him into partnership as from 1st April 2013,
giving him 1/8th share of profits. The agreement provided that any
92. A, B & C had capitals of Rs.50,000; Rs.40,000 and Rs.30,000 respectively for excess over his former remuneration to which C becomes entitled will
carrying on business in partnership. The firm’s reported profit for the year be borne by A and B in the ratio of 2:3. The profit for the year ended
was Rs.80,000. Find out the share of profit of each partner after providing 31-3-2014 amounted to Rs.44,400. B’s share of profit will be ….
interest on an advance by A of Rs.20,000. (A) 23,540 (B) 16,000 (C) 15,310 (D) 4,400
(A) 26,267 to each partner
(B) 26,267 for two partner & 26,266 for one partner 96. P & S sharing profits & losses in the ratio of 7:3 respectively. As a mark
(C) Rs.30,000 each partner. of appreciation of the services of their manager Z, they admitted him
(D) Rs.33,333 for A, Rs.26,667 for B and Rs.20,000 for C. into partnership on 1st April 2014 giving him 1/10th share of the future
profits, the mutual ratio between P & S remaining unchanged. Before
93. X, Y & Z are partners sharing profits and losses in the ratio of 4:3:2. During becoming a partner, Z was getting a salary of Rs.4,000 per month and a
2015, their capital, drawings & salaries were as follows: commission of 5% on the net profits remaining after charging his salary
and commission. It was agreed that any excess over his former
Partners Capital Salaries Drawings remuneration to which Z as a partner becomes entitled will be provided
X 2,40,000 12,000 12,000 out of P’s share of profit. Net profit for the year ended 31-3-2015
Y 1,60,000 12,000 6,000 amounted to Rs.19,80,000. P’s share of profit =?
Z 1,00,000 12,000 3,000 (A) 12,88,000 (B) 12,30,000 (C) 12,83,000 (D) 12,38,000

Partners are entitled to interest on capital @ 5% p.a. Interest on drawings 97. X, Y Ltd. & Z Ltd. are partners of X & Co. The partnership deed
to be charged @ 8% p.a. The net profit for the year ended 31-12-2015 was provided that:
Rs.1,45,000. On 1-7-2015 X made advance of Rs.1,00,000 to the firm at 6%  Mr. X is to be remunerated at 15% of the net profits after charging his
p.a. Y’s share of profit after above appropriation will be ……. remuneration, but before charging interest on capital and provision for
(A) 37,707 (B) 27,280 (C) 18,853 (D) 25,753 taxation.
 Interest is to be provided on capital at 15% p.a.
94. Rohit & Rahul are sharing profits and losses in the ratio of 3:2. The chief  Balance profits after making provision for taxation, is to be shared in
clerk of the firm, Rohan, is admitted as a partner with effect from 1-1-2014, the ratio of 1:2:2.
and becomes entitled in 1/10th of the net profits, the mutual ratio between

Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL Page 8

 During the year ended 31st March 2014:
(i) The net profit before tax and before making any payment to partners
amounted to Rs.6,90,000.
(ii) Interest on capitals at 15% p.a. amounted to: Rs.60,000 for X,
Rs.1,50,000 for Y Ltd. & Rs.1,80,000 for Z Ltd.
(iii) Provision for tax is to be at 40% of “Total Income” of the firm.
The total income has been computed at Rs.1,95,000.
Y Ltd.’s share of profit will be –
(A) 1,32,000 (B) 52,800 (C) 85,500 (D) 1,12,800
102. A, B & C share profits on the basis of capital account balances of
Rs.15,000, Rs.15,000 & Rs.30,000. Partnership income is Rs.1,00,000
for this accounting period. All of the following statements regarding the
profit allocation are false except –
(A) Only Rs.60,000 of the profits will be allocated; the remaining Rs.40,000
is a bonus.
(B) B’s capital account will be total Rs.40,000 after the profit allocation.
(C) C will receive Rs.50,000 in cash as a result of the profit sharing.
(D) A’s capital account will be debited for Rs.25,000.

98. P & Q are sharing profits & losses in the ratio of 5:4. On 1-4-2010 they 103. On 1-1-2015 balance in capital account of partner was Rs.1,00,000. He
admitted their Manager R into partnership for 1/5th the share of the profits.
As Manager, R was receiving a salary of Rs.60,000 per year and a
commission of 5% on the net profit after charging such salary and
commission. It is however, agreed that any excess over his former
remuneration to which R becomes entitled as a partner is to be borne by P.
The profits of the firm for the year ended 31-3-2011 amounted to
Rs.4,27,500. P’s share of profit will be ……
(A) 1,94,444 (B) 77,500 (C) 85,500 (D) 1,86,444
99. G, S & C are partners entered into partnership on 1-1-2014 sharing profits
and losses in the ratio of 2:2:1. G, however, personally guaranteed that C’s
share of profit, after charging interest on capital @ 5% p.a., would not be
less than Rs.8,000 in any year. The capitals were: A Rs.50,000; B Rs.30,000;
& C Rs.20,000. The profit for the year ended 31-12-2014 amounted to
Rs.35,000. G’s share of profit will be …….
(A) 12,000 (B) 8,000 (C) 6,000 (D) 10,000
100. X & Y were in partnership sharing profits and losses in the ratio of 3:1.
They took Z into partnership on a monthly salary of Rs.800 and 10% of the
profits after charging salary and such 10% profit or 1/5th share of profit,
whichever is higher. Should the latter exceeds former, the excess is to be
borne by X. The profit for the year ended amounted to Rs.1,05,600.
X’s share of profit will be –
(A) 65,455 (B) 62,662 (C) 87,273 (D) 96,000
101. G invests the following into a new partnership: Building with a current
market value of Rs.8,00,000 originally acquired for Rs.5,00,000,
accumulated amortization Rs.3,00,000, mortgage payable Rs.4,00,000. Using
the above information, the amount of Grant’s initial investment is –
(A) Rs.2,00,000 (B) Rs.4,00,000 (C) Rs. (2,00,000) (D) Rs.8,00,000
introduced certain amount on 1-5-2015. As per partnership deed
interest on capital is to be provided @ 12% p.a. If Profit & Loss
Appropriation A/c is debited for Rs.18,000 as interest on capital, how
much amount was introduced by the partner on 1-5-2015?
(A) 18,000 (B) 60,000 (C) 75,000 (D) 1,00,000
104. On 1-1-2015 balance in capital account of partner was Rs.5,00,000. He
introduced Rs.1,50,000 on 1-5-2015. He further introduced certain
amount on 1.10.2015. As per partnership deed interest on capital is to
be provided @ 8% p.a. If Profit & Loss Appropriation A/c is debited
for Rs.52,000 as interest on capital, how much amount was introduced
by the partner on 1-10-2015?
(A) 52,000 (B) 1,50,000 (C) 2,00,000 (D) 1,02,000
105. X & Y are partners sharing profit & loss at the ratio of 1/3 & 2/3
respectively. Net income for this accounting period is Rs.10,000, while
salary of X = Rs.2,000, interest on Y’s drawings = Rs.3,000 and interest
on X’s capital = Rs.2,000. What is the X’s share of profit or loss after
the adjustment for partner’s salary, interest on capital and interest on
drawings?
(A) 3,000 (B) 6,000 (C) 9,000 (D) 2,000
106. In a partnership firm, in the beginning of the year, capital of on
partner is Rs.80,000. During the year, he introduced Rs.7,000 as
additional capital. In addition to this, he withdraws Rs.2,000 in the
middle of each month. The firm does not pay interest on capital but
charges 6% interest on drawings. His share profit after interest on
drawings is Rs.20,000. At the end of the year, his capital in the firm
would be –
(A) 83,000 (B) 1,05,000 (C) 82,280 (D) 1,09,000

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107. Interest on Capital will be paid to the partners if provided for in the
agreement but only from __.
(a) reserves (b) accumulated profits (c) goodwill (d) current profits

108. Fluctuating capital account is credited with ___.

(a) interest on capital
(b) profit for the year
(c) salaries or remuneration of the partners
(d) all of the above

109. Shukh and Shanti are partners with the capital of Rs.50,000 and Rs.30,000
respectively. The profit earned by the firm is Rs.6,000. Interest payable on
capital is 10% p.a. subject to the provisions of Partnership Act. Find the
interest on capital for both the partners.
(a) Rs.5,000 and Rs.3,000 (b) Rs.3,000 and Rs.3,000
(c) Rs.3,750 and Rs.2,250 (d) Rs.3,000 and Rs.1,800

110. Net profit of Ex Ltd. before allowing remuneration and commission to

Mehta, the Manager was Rs.7,02,000. Mehta was entitled to a monthly
remuneration of Rs.6,000 plus a commission of 5% of net profits after
changing remuneration and such commission. Find out the total amount
payable to Mehta.
(a) Rs.72,000 (b) Rs.1,02,000 (c) Rs.30,000 (d) Rs.6,000

111. At the end of the year 2016-17, Aman’s capital was Rs.5,00,000. The profit
for the year was Rs.1,00,000. During the year he had drawn Rs.50,000 from
the business for personal use. The interest on opening capital @ 10% for the There is no secret to success. It is the result
year should be:
(a) Rs.50,000 (b) Rs.5,50,000 (c) Rs.45,000 (d) Rs.55,000 of preparation, hard work, and learning
from failure.

Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL Page 10

 Answers

1 21 41 61 81 101
2 22 42 62 82 102
3 23 43 63 83 103
4 24 44 64 84 104
5 25 45 65 85 105
6 26 46 66 86 106
7 27 47 67 87 107
8 28 48 68 88 108
9 29 49 69 89 109
10 30 50 70 90 110
11 31 51 71 91 111
12 32 52 72 92
13 33 53 73 93
14 34 54 74 94
15 35 55 75 95
16 36 56 76 96
17 37 57 77 97
18 38 58 78 98
19 39 59 79 99
20 40 60 80 100

Compiled By: PRINCE TYAGI, BCOM(hons), CA FINAL, CS FINAL Page 11