Introduction to Partnership Accounts-Test 5

Partner’s current accounts are opened when their capital accounts are

In the absence of an agreement of the contrary, the partners shall

What accounts are debited and credited to record the division of net income among partners at the end of the accounting year:

The current account of a partner

While making and adjustment entry in respect of interest on capital, credit is made to

When premium in Joint Life Policy is treated as an expense. Joint Life Policy will appear in Balance Sheet at :

In the absence of an agreement to the contrary, the partners

When interest is to be allowed on the capitals of the partners, it is calculated on the basis of the

What accounts are debited and credited to record a partner’s cash withdrawal in lieu of salary

In the absence of an agreement to the contrary, the partners are

To which account would the interest on the capital accounts of partners be credited ?

Profit and loss appropriation account is used to

What would be the accounting entry for a partner’s withdrawal of each in lieu of salary ?

In which account is the interest payable on the capitals of the partner charged ?

Which of the following statement are appropriate in respect of partnership accounts ?

1. In the absence on any provision in the partnership agreement to the contrary, partners can charge interest @ 6% per annum on loans given by them to the partnership firm.
2. an ordinary partnership firm can have not more than 50 partners
3. A banking partnership firm can have not more than 10 partners.
4. In the absence of any provision in the partnership agreement to the contrary, profits and losses are shared by the partners in the ratio of their capitals.

Select the correct answer from the codes given below:

Goodwill is an asset that represents

If Goodwill is withdrawn by the partners, their account is credited to

Weighted average method of valuation of goodwill is used to

An asset which is not fictitious but intangible in nature, having realizable value.

Monetary value of the reputation, connections and profit earning capacity a firm

Excess of average profit earned by the firm over and above its normal profit.

Rate of profit estimated or expected on capital employed.

The total of the shares sacrificed by the ______ in equal to the share given to new partner.

Partners are liable to receive interest on their loan @ _______, in the absence of any agreement

Interest on ______ will be paid to the partners if provided for in the agreement but only from ________.

Normally, the partners are entitled to _______ interest on their capitals, _______.

Partnership arises from status.

A right to share a profit is the real proof of one being a partner

A partnership firm enjoys a separate legal personality apart from is partners.

Change in profit sharing ratio of the existing partners does not amount to reconstitution of the partnership firm.