You can also read: Accounting MCQ questions with answers [Class 12th]
MCQ on Partnership Accounts – 1
1. Profit and Loss Appropriation Account shows:
(a) Gross Profit
(b) Appropriation of Profit
(c) Net Profit
(d) Excess of Income over Expenditure
Ans. (b) Appropriation of Profit
2. For distribution of profit amongst partners, the account which is opened, is:
(a) Revaluation Account
(b) Profit and Loss Appropriation Account
(c) Profit and Loss Adjustment Account
(d) Profit and Loss Account
Ans. (b) Profit and Loss Appropriation Account
3. In the absence of agreement, profits are divided by partners in the
ratio of:
(a) Equal
(b) Capital
(c) Time devoted
(d) None of these
Ans. (a) Equal
4. Interest on partner’s loan is paid at the rate of:
(a) 4% pa.
(b) 6% pa.
(c) 10% p.a.
(d) 5% pa.
Ans. (b) 6% p.a.
5. In the absence of agreement, partners are not entitled to receive:
(a) Salaries
(b) Commission
(c) Interest on Capital
(d) All of the above
Ans. (d) All of the above
6. Partner’s Current Accounts are opened, when the capitals are:
(a) Fixed
(b) Fixed or Fluctuating
(b) Fluctuating
(d) All of the above
Ans. (a) Fixed
7. When dates of withdrawal are not mentioned, interest on drawings is charged for:
(a) 6 months
(b) 6 months
(c) 5 months
(d) 12 months
Ans. (a) 6 months
8. Interest on capital is calculated on the:
(a) Opening Capital
(b) Closing Capital
(c) Average Capital
(d) Closing Capital less drawings
Ans. (a) Opening Capital
9. The fluctuating capital account of a partner will always
have:
(a) Credit balance
(b) Debit balance
(c) No balance
(d) May have debit or credit balance
Ans. (d) May have debit or credit balance
10. When partner is entitled to interest on capital, it is payable:
(a) Out of Profits
(b) Out of Capital
(c) May be out of profits or capital have:
(d) None of these
Ans. (a) Out of Profits
11. An ordinary partnership firm may have:
(a) Not more than 10 partners
(b) Not more than 20 partners
(c) Any number of partners
(d) Not more than 50 partners
Ans. (d) Not more than 50 partners
12. The Current Account of a partner always shows:
(a) Credit balance
(b) Debit and credit balance
(c) Debit balance
(d) Either debit or credit balance
Ans. (d) Either debit or credit balance
13. Which account is prepared by partnership firm for the distribution of profit?
(a) Profit and Loss Account
(b) Profit and Loss Appropriation Account
(c) Partners’ Loan Account
(d) Income and Expenditure Account
Ans. (b) Profit and Loss Appropriation Account
14. Which of the following is essential feature of Partnership?
(a) Mutual trust
(b) Honesty
(c) True and Fair Accounts
(d) All of the above
Ans. (d) All of the above
15. What is the minimum required number of partners to form a partnership?
(a) 4
(b) 5
(c) 2
(d) 10
Ans. (c) 2
16. Which of the following is not a content of partnership deed?
(a) Names of partners
(b) Amount available in personal account
(c) Addresses of partners
(d) Profit-sharing ratio
Ans. (b) Amount available in personal account
17. In the absence of partnership deed, partners’ are entitled to receive interest on
drawings:
(a) 4 % p.a.
(b) 5% p.a.
(c) No interest p.a.
(d) 10% p.a.
Ans. (c) No interest
18. Interest on loan of a partner:
(a) is a charge on profit
(c) is a share of partner’s profit
(b) is an appropriation of profit
(d) All of the above
Ans. (a) is a charge on profit
19. Partner’s Fixed Capital Account always shows:
(a) a credit balance
(b) debit and credit balance
(c) a debit balance
(d) either debit or credit balance
Ans. (a) a credit balance
20. Interest on partner’s loan is debited to:
(a) Profit and Loss Appropriation A/c
(b) Partners’ Capital Account
(c) Profit and Loss A/c
(d) Partner’s Current A/c
Ans. (c) Profit and Loss A/c
MCQ on Partnership Accounts – 2
1. A new partner may be admitted to a partnership:
(a) Without the consent of old partners
(b) With the consent of all old partners
(c) With the consent of any one partner
(d) With the consent of 2/3rd of old partners
ANS. (b) With the consent of all old partners
2. Goodwill is a:
(a) Current Asset
(b) Intangible Asset
(c) Wasting Asset
(d) Liquid Asset
ANS. (b) Intangible Asset
3. When a new partner brings his share of goodwill in cash, the amount is debited to:
(a) Premium A/c
(b) Cash A/c
(c) Capital A/cs of old partners
(d) Capital A/c of new partner
ANS. (b) Cash A/c
4. When a new partner does not bring his share of goodwill in cash, the amount is debited to:
(a) Premium A/c
(b) Current A/c of new partner
(c) Cash A/c
(d) Capital A/cs of old partners
ANS. (b) Current A/c of new partner
5. Goodwill brought in cash, will be shared by old partners in:
(a) Sacrificing ratio
(b) New profit-sharing ratio
(c) Capital ratio
(d) Old profit-sharing ratio
ANS. (a) Sacrificing ratio
6. If at the time of admission, there is some unrecorded liability, it will be:
(a) Debited to Revaluation A/c
(b) Credited to Revaluation A/c
(c) Transferred to Old Partner’s Capital A/cs
(d) Transferred to All Partner’s Capital A/cs
ANS. (a) Debited to Revaluation A/c
7. The sacrifice of old partners is equal to:
(a) Their new share
(b) Their old share
(c) New share – Old share
(d) Old share – New share
ANS. (d) Old share - New share
8. Profit or loss on revaluation is transferred to Partners’ Capital A/cs in:
(a) Old ratio
(b) New ratio
(c) Equal Ratio
(d) None of the above
ANS. (a) Old ratio
9. Accumulated profits at the time of admission of a partner is transferred to:
(a) Old partners’ capital accounts
(b) Revaluation account
(c) Balance sheet
(d) None of the above
ANS. (a) Old partners' capital accounts
10. Which of the following is debited to partners’ capital accounts at the time of admission
partner?
(a) General Reserve
(b) Profit on revaluation
(c) Accumulated losses
(d) Accumulated profits
ANS. (c) Accumulated losses
11. When the new partner brings in his share of goodwill in cash, it is credited to capital
accounts of:
(a) Sacrificing partners
(b) New partner
(c) Gaining partners
(d) Old Partners
ANS. (a) Sacrificing partners
12. The premium for goodwill brought in by the new partner will be transferred to old partners’ capital accounts in:
(a) Old profit-sharing ratio
(b) Gaining ratio
(c) Sacrificing Ratio
(d) None of the above
ANS. (c) Sacrificing Ratio
13. Revaluation Account is a:
(a) Real account
(b) Nominal Account
(c) Personal account
(d) All of the above
ANS. (b) Nominal Account
14. At the time of admission of a partner, Investments fluctuation fund, after meeting the loss on revaluation of investments, is transferred to:
(a) Revaluation account
(b) New partner’s capital account
(c) Sacrificing partners’ capital A/cs
(d) Old partners’ capital accounts
ANS. (d) Old partners' capital accounts
15. On the admission of a partner, decrease in the value of assets is recorded in:
(a) Profit and Loss adjustment A/c
(b) Old partners’ Capital A/cs
(c) Cash A/c
(d) None of the above
ANS. (a) Profit and Loss adjustment A/c
16. Rajesh and Bikash are sharing profits in the ratio of 4:3. Ramesh joins and the new profit-sharing ratio among Rajesh , Bikash and Ramesh is 7:4:3. The sacrificing ratio of Rajesh and Bikash is:
(a) 1:2
(b) 2:3
(c) 4:1
(d) 5:6
ANS. (a) 1:2
17. A, B and C are partners sharing profits in the ratio of 4:3:2. D is admitted for 1/3rd share in future profits. The sacrificing ratio is:
(a) 2:3:1
(b) 4:3:2
(c) 3:2:1
(d) 5:4:2
ANS. (b) 4:3:2
18. L and M are sharing profits and losses in the ratio of 2:2. They admit N as a partner who takes 1/4th share from L and 1/8th share from M. New profit-sharing ratio is:
(a) 2:3:2
(b) 1:1:1
(c) 3:2:1
(d)5:3:2
ANS. (a) 2:3:2
19. A and B are partners. They admit C for 1/4th share. In future, the ratio between A and B would be 2:1. Which of the following is new profit-sharing ratio of partners?
(a) 5:3:2
(b) 2:1:1
(c) 26:19:5
(d) 8:5:3
ANS. (b) 2:1:1
20. A and B are in partnership sharing profits and losses as 3:2. C is admitted for 1/4th share. Afterwards, D enters for 20 paisa in the rupee. After D’s admission, the new profit-sharing ratio among A, B, C and D is:
(a) 4:3:2:1
(b) 4:3:3:2
(c) 3:1:1:1
(d) 9:6:5:5
ANS. (d) 9:6:5:5
21. Profit on revaluation is not credited to the capital account of:
(a) Sacrificing Partners
(b) New Partner
(c) Gaining Partner
(d) Old Partners’
ANS. (b) New Partner
22. The purpose of Profit and Loss Adjustment Account is:
(a) to find out gross profit
(b) to find out net profit
(c) to find out financial position
(d) to find out results of revaluation of assets and liabilities
ANS. (d) to find out results of revaluation of assets and liabilities
23. On admission of a new partner, the increase in the value of assets is debited to:
(a) Asset A/c
(b) Revaluation A/c
(c) Partners’ Capital A/c
(d) Profit and Loss A/c
ANS. (a) Asset A/c
24. Which of the following is a method of calculation of goodwill:
(a) Average profit method
(b) Super profit method
(c) Capitalisation method
(d) All of the above
ANS. (d) All of the above
25. Number of purchase years is used to calculate:
(a) Gaining ratio
(b) Net Profit
(c) Goodwill
(d) Loss on revaluation
ANS. (c) Goodwill
