1 hour Time is allowed to Solve these MCQs.
(PYQs CUET Accounts)
Q1. One of the following is not an Item of appropriation.
*1st June, 2023*
(a) Interest on capital
(b) Commission to partner
(c) Interest on Loan from partner
(d) Salary to partner
Q2. A, B and C are partners sharing profits and losses in the ratio of 5: 3: 1. After the final accounts have been prepared, it was discovered that interest on drawings had not been taken into consideration. The interest on drawings of partners amounted to A ₹8,000, B ₹6,000 and C ₹4,000. In the adjusting entry:
*5th June, 2023*
(a) A will be debited by ₹2,000 and B will be credited by ₹2,000
(b) B will be debited by ₹2,000 and C will be credited by ₹2,000
(c) C will be debited by ₹2,000 and B will be credited by ₹2,000
(d) C will be debited by ₹2,000 and A will be credited by ₹2,000
Q3. Current account of each partner is debited by the amount of:
*5th June, 2023*
(a) Drawings out of capital
(b) Interest on drawings
(c) Fresh capital introduced
(d) Interest allowed on capital
Q4. Jaron, a partner in IT Travels withdrew same amount of money at the end of each quarter, for his personal use. The firm charged ₹465 as interest on his drawings. Interest on drawings is to be charged at 8% per annum. What amount was withdrawn by him at the end of each quarter?
*5th June, 2023*
(a) ₹15,500
(b) ₹3,875
(c) ₹2,235
(d) ₹9,300
Q5. When the total amount withdrawn is given but the date of withdrawal is not given then interest on drawings is charged for a period of:
*6th October, 2022*
(a) 3 months
(b) 6 months
(c) 9 months
(d) 12 months
Q6. The capital accounts of partners will always show a balance under fixed capital account method
*6th October 2022*
(a) Debit
(b) Credit
(c) Zero
(d) Negative
Q7. Calculate interest on drawings if an amount of ₹7,500 is withdrawn at the end of bimonthly for the year. Rate of interest on drawing is 8% p.a.
*7th June, 2023*
(a) ₹1,500
(b) ₹3,000
(c) ₹2,500
(d) ₹2,256
Q8. Identify the section of the Indian Partnership Act, 1932, that states that the outgoing partner has an option to receive either interest @ 6% p.a till the date of payment or such share of profits which has been earned with his/her money.
*7th June, 2023*
(a) Section 2
(b) Section 32
(c) Section 7
(d) Section 37
Q9. A and B are partners their respective capitals are ₹50,000 and ₹30,000. Interest on capital is agreed @ 6% p.a. B is allowed an annual salary ₹2,500. Profit during the year prior to calculation of interest on capital but after charging B’s salary is ₹12,500. 5% of net profit is paid to manager as commission. The amount of commission paid to manager is
*10th June, 2023*
(a) ₹1,500
(b) ₹1,250
(c) ₹1,000
(d) ₹750
Q10. During financial year 2021-22, Sahil withdrew ₹30,000 quarterly in the beginning of every quarter. If interest to be charge is 8% p.a. Calculate the amount of interest on drawings:
*10th June, 2023*
(a) ₹3,600
(b) ₹4,800
(c) ₹2,400
(d) ₹6,000
Q11. ______ is an extension of Profit & Loss A/c in case of partnership firm.
*10th June, 2023*
(a) Revaluation A/c
(b) Partner’s Capital A/c
(c) Suspense A/c
(d) Profit & Loss appropriation A/c
Q12. If the partner’s capital accounts are fixed, where will you record drawings made by a partner out of his capital during the year.
*12th June, 2023*
(a) Debit side of Partner’s Current A/c
(b) Debit side of Partner’s Capital A/c
(c) Credit side of Partner’s Capital A/c
(d) Credit side of Partner’s Current A/c
Q13. Under rule 10 of the companies (Miscellaneous) Rules 2014. What is the maximum number of partners a partnership firm can have?
*12th June, 2023*
(a) 20
(b) 50
(c) 100
(d) unlimited
Q14. Nawab, Shanaya and Hritik are partners sharing profits and losses in the ratio of 5: 3: 2. The partnership deed provides for charging interest on drawings @10% p.a. The drawings of Nawab, Shanaya and Hritik were ₹20,000, ₹15,000 and ₹10,000 respectively. After final accounts have been prepared, it was discovered that interest on drawings has not been charged. The adjusting entry will be:
*16th June, 2023*
(a) Shanaya Capital A/c Dr. 75
Hritik Capital A/c Dr. 50
To Nawab Capital A/c 125
(b) Shanaya Capital A/c Dr. 125
To Hritik Capital A/c Dr. 50
To Nawab Capital A/c 75
(c) Nawab Capital A/c Dr. 125
To Shanaya Capital A/c 75
To Hritik Capital A/c 50
(d) Shanaya Capital A/c Dr. 150
Hritik Capital A/c Dr. 100
To Nawab Capital A/c 250
Q15. Mr. Kunal withdrew ₹10,000 per month at the end of each month from a firm for his personal use during the year ending March 31, 2022. What will be the interest on drawings if charged @8% p.a.?
*16th June, 2023*
(a) ₹600
(b) ₹5,200
(c) ₹4,800
(d) ₹4,400
Q16. A partnership can have maximum 50 partners. This limit has been set by the:
*17th May, 2024*
(a) Indian Partnership Act, 1932
(b) State Government
(c) Indian Contract Act, 1872
(d) Central Government
Q17. Identify the way by which the clauses of partnership deed can be altered.
*20th May, 2023*
(a) On the basis of majority partners’ consent
(b) On the basis of registrar of companies’ consent
(c) On the basis of all the partners’ consent
(d) Clauses of partnership deed cannot be altered
Q18. Salary of a partner is shown in
*20th May, 2023*
(a) Profit and Loss A/c
(b) Profit and Loss Appropriation A/c
(c) Trading A/c
(d) Manufacturing A/c
Q19. Which Act prescribes the maximum numbers of partners in a partnership firm?
*25th May, 2023*
(a) Indian Contract Act 1872
(b) Indian Partnership Act 1932
(c) Indian Companies Act 2013
(d) Negotiable Instruments Act 1882
Q20. Rahul and Samarth were partners sharing P & L in ratio 2:1. Their fixed capitals were ₹8,00,000 and ₹10,00,000 respectively for the year ended March 31, 2023, the profits of ₹6,00,000 were distributed without providing for Interest on Capitals @ 10% p.a. as provided in deed.
While Passing adjustment entry, Samarth’s Current A/c will be ______ by ______.
*25th May, 2023*
(a) Debited ₹40,000
(b) Credited ₹40,000
(c) Debited ₹60,000
(d) Credited ₹1,00,000
Q21. Rama and Shama are two partners sharing profits & losses in ratio of 3:5. Their capital accounts showed balances of ₹1,50,000 and ₹2,00,000 on 1st April, 2021. Calculate interest on capital to be paid for the year ending 31 March 2022, if partnership deed provides for interest on capital @ 10% and the firm has earned a profit of ₹28,000 during the year.
*26th May, 2023*
(a) ₹15,000 and ₹20,000
(b) ₹14,000 and ₹14,000
(c) ₹12,000 and ₹16,000
(d) ₹10,500 and ₹17,500
Q22. “The business of a partnership firm may be carried on by all the partners or any of them acting for all.” Identify the feature of the partnership indicated by the above statement.
*25th May, 2023*
(a) Agreement
(b) Business
(c) Mutual Agency
(d) Sharing of profits
Q23. In the absence of partnership deed which of the following rule is followed:
*5th June 2023*
(a) Interest on Capital is allowed @ 6% p.a.
(b) Interest on drawings is charged @ 6% p.a.
(c) Profits and Losses are shared equally
(d) Profits and Losses are shared according to capital contribution
Q24. Choose the amount of Interest on Drawings charged from Ajay if he withdrew ₹10,000 at the beginning of each month from the firm for his personal use during the year ending March 31, 2022 for whole year and interest on Drawing is charged @ 8% p.a.
*25th May, 2023*
(a) ₹4,800
(b) ₹4,200
(c) ₹5,200
(d) ₹9,600
Q25. A and B are partners sharing profit in the ratio of 3: 2. On 31st March, 2023, the Capital Account balance stood as A – ₹1,29,000 and B – ₹86,000. The divisible profit of ₹50,000 has been distributed between A and B accordingly and Interest on capital @ 10% p.a. has also been credited. A has also obtained salary @ ₹10,000 annually. Calculate Interest on B’s capital.
*26th May, 2023*
(a) ₹9,900
(b) ₹9,000
(c) ₹6,600
(d) ₹6,000
Q26. Partnership deed should be drafted and prepared as per:
(a) Provision of Partnership Act
(b) Companies Act
(c) Registrar of Firms
(d) Provisions of the Stamp Act
Q27. In a partnership firm, partners share profit and loss in the ratio of 3:2. If the firm incurred a loss of ₹10,000 during the year, then calculate the amount of loss to be shared by partners.
*29th May, 2023*
(a) Equally
(b) According to profit sharing ratio
(c) According to gaining ratio
(d) According to sacrificing ratio
Q28. In which of the following case, claim is valid if the partnership agreement is silent?
*29th May, 2023*
(a) Sanjay is an active partner and wants a salary of ₹1,00,000 per year.
(b) Monika had advanced a loan to the firm and claims interest @ 10% per annum.
(c) Sanjay and Monika contributed ₹2,00,000 and ₹5,00,000 as capital respectively and Monika wants equal share.
(d) Monika wants interest on capital to be credited @ 10% per annum.
Q29. In the absence of partnership deed, which of the following statement is correct?
*30th May, 2023*
(a) Interest on partners’ Capital will be allowed @ 6% p.a.
(b) Interest on partners’ Loan is to be given @ 6% p.a.
(c) Profits are shared in the ratio of Capital
(d) Interest on Drawing is to be charged @ 6% p.a.
Q30. In the absence of partnership deed, identify the rate of interest that should be charged on the drawings of a partner:
*30th May, 2023*
(a) 6%
(b) 6% p.a.
(c) As decided by the partner, who had withdrawn money as drawing
(d) No interest is to be charged
Q31. According to partnership act, if the deed is silent then the profit-sharing ratio will be : (Assuming there are only two partners)
*30th May, 2023*
(a) In partners’ capital ratio
(b) 2 : 1
(c) Equally
(d) 1 : 2
Q32. Calculate the amount of A’s Commission from the following items:
Net profit before commission ₹1,65,000 and Mr. A is entitled for a commission of 10% of net profit after charging such commission.
*30th May, 2023*
(a) ₹16,500
(b) ₹15,000
(c) ₹16,000
(d) ₹15,500
Q33. The personal assets of the partners can be used to pay off firm’s debts, if firm’s assets are not sufficient, in which of the following feature of partnership is highlighted above?
*30th May, 2023*
(a) Agreement
(b) Mutual Agency
(c) Unlimited Liability of Partners
(d) Sharing of Profits
Q34. Raman, a partner withdrew ₹10,000 at the beginning of every month for the first 8 months, then ₹15,000 at end of every month for the last 4 months. Calculate interest on drawings to be charged at 6% p.a. for the year ending March 31, 2023.
*31st May, 2023*
(a) ₹3,700
(b) ₹537.50
(c) ₹8,400
(d) ₹3,850
Q35. Match List – I with List – II.
| LIST – I | LIST – II |
| (A) Interest on partner’s loan | (I) Profit and Loss Appropriation A/c |
| (B) Personal account | (II) Balance Sheet |
| (C) Position statement | (III) Capital Account |
| (D) Commission to a partner | (IV) Profit and Loss Account |
| Choose the correct answer from the options given below: | |
| *1st June, 2023* | |
| (a) (A)-(III), (B)-(I), (C)-(IV), (D)-(II) | |
| (b) (A)-(III), (B)-(IV), (C)-(II), (D)-(I) | |
| (c) (A)-(IV), (B)-(III), (C)-(II), (D)-(I) | |
| (d) (A)-(IV), (B)-(I), (C)-(III), (D)-(II) |
Q36. Match List I with List II in context of not having partnership deed.
| LIST I | LIST II |
| A. Interest on loan | I. Equal |
| B. Interest on drawings | II. Will not be charged |
| C. Salary | III. @6% p.a. |
| D. Profit sharing ratio | IV. Will not be allowed/provided |
| Choose the correct answer from the options given below: | |
| *6th October, 2022* | |
| (a) A-IV, B-I, C-III, D-II | |
| (b) A-III, B-IV, C-II, D-II | |
| (c) A-IV, B-III, C-II, D-I | |
| (d) A-III, B-II, C-IV, D-I |
Q37. Match List I with List II.
| LIST – I | LIST – II |
| (A) Interest on Advances by partner | (I) Not charged |
| (B) Interest on Drawings | (II) 6% p.a. |
| (C) Interest on capital | (III) Equal |
| (D) Profit sharing ratio | (IV) Not allowed |
| Choose the correct answer from the options given below: | |
| *10th June, 2023* | |
| (a) A-IV, B-II, C-I, D-III | |
| (b) A-II, B-I, C-IV, D-III | |
| (c) A-IV, B-II, C-III, D-I | |
| (d) A-IV, B-I, C-II, D-III |
Q38. Match List I with List II – When the partner’s capital is fixed.
| LIST – I | LIST – II |
| A. Additional capital introduced | I. Credit side of current account |
| B. Withdrawal of capital | II. Debit side of current account |
| C. Drawings | III. Debit side of partner capital account |
| D. Salary payable to partner | IV. Credit side of partner capital account |
| Choose the correct answer from the options given below: | |
| *16th June, 2023* | |
| (a) A-IV, B-III, C-II, D-I | |
| (b) A-I, B-II, C-III, D-IV | |
| (c) A-II, B-I, C-III, D-IV | |
| (d) A-II, B-III, C-IV, D-I |
Q39. Match List – I with List – II.
| LIST – I | LIST – II |
| (A) Salary to partner | (I) Credit side of Partner’s Capital Account |
| (B) Interest on partner’s loan | (II) Debit side of Partner’s Current Account |
| (C) Interest on partner’s drawings | (III) Debit side of Profit and Loss Account |
| (D) Additional capital introduced | (IV) Credit side of Partner’s Current Account |
| Choose the correct answer from the options given below: | |
| *17th May, 2024* | |
| (a) (A) – (I), (B) – (II), (C) – (III), (D) – (IV) | |
| (b) (A) – (I), (B) – (III), (C) – (II), (D) – (IV) | |
| (c) (A) – (IV), (B) – (III), (C) – (II), (D) – (I) | |
| (d) (A) – (III), (B) – (IV), (C) – (I), (D) – (II) |
Q40. Match List – I with List II.
| LIST – I | LIST – II |
| (Equal amount of drawings made) | (Number of months for which interest calculated) |
| (A) At the end of each half year | (I) 4.5 months |
| (B) At the beginning of each quarter | (II) 6.5 months |
| (C) At the beginning of each month | (III) 7.5 months |
| (D) At the end of each quarter | (IV) 3 months |
| Choose the correct answer from the options given below: | |
| *17th May, 2024* | |
| (a) (A) – (I), (B) – (II), (C) – (III), (D) – (IV) | |
| (b) (A) – (I), (B) – (III), (C) – (II), (D) – (IV) | |
| (c) (A) – (IV), (B) – (II), (C) – (I), (D) – (III) | |
| (d) (A) – (IV), (B) – (III), (C) – (II), (D) – (I) |
Q41. Match List I with List II
| LIST I | LIST II |
| A. Only Capital A/c exist | I. Credited to partners’ capital account |
| B. Capital account balance remain unchanged | II. Debited to Partner’s Capital Account |
| C. Fresh/additional capital brought in by partner | III. Fixed Capital Account |
| D. Permanent withdrawal | IV. Fluctuating Capital Account |
| Choose the correct answer from the options given below: | |
| *20th May, 2023* | |
| (a) A-I, B-II, C-III, D-IV | |
| (b) A-II, B-III, C-IV, D-I | |
| (c) A-IV, B-III, C-I, D-II | |
| (d) A-III, B-IV, C-I, D-II |
Q42. ______ is / are not true with regard to Limited liability partnership.
(A) Separate Legal entity
(B) Unlimited liability for one partner
(C) Indian Partnership Act, 1932 is applicable
(D) Perpetual Succession.
(E) Unlimited liability of partners
Choose the correct answer from the options given below:
*11th June, 2023*
(a) (A) and (B) Only
(b) (B), (C) and (E) Only
(c) (B) and (C) Only
(d) (D) and (E) Only
Q43. Select the items which will be recorded in Partner’s capital Accounts as per Fixed Capital method.
A. Withdrawal of capital
B. Drawings
C. Additional Capital
D. Interest on Capital
E. Interest on Drawings
Choose the correct answer from the options given below:
*10th June, 2023*
(a) A and C only
(b) A, B and C only
(c) B, D and E only
(d) A, C and D only
Q44. In the absence of a partnership deed which of the following are correct.
(A) Profit sharing ratio will be on the basis of capital contributed by the partners
(B) No interest on capital will be provided
(C) No interest on Drawing will be charged
(D) 6% p.a. interest on partner’s loan will be provided
(E) Partner will get salary for extra time devoted for the firm
Choose the correct answer from the options given below:
*11th June, 2023*
(a) (A), (B) and (C) Only
(b) (A), (D) and (E) Only
(c) (D) and (E) Only
(d) (B), (C) and (D) Only
Q45. In the absence of partnership deed:
(A) Partners are allowed interest on capital @6% p.a.
(B) Partners are allowed interest on loan advanced by them @6% p.a.
(C) Partners are allowed salary if they are working partners.
(D) Profits are shared according to capital ratio.
(E) Profits are shared in equal ratio.
Choose the correct answer from the options given below:
*1st June, 2023*
(a) (A) and (C) only
(b) (B) and (C) only
(c) (B) and (E) only
(d) (C) and (D) only
Q46. Profit and loss Appropriation A/c includes:
A. Interest on capital
B. Interest on drawing
C. Partner’s salary
D. Rent to partners
E. Interest on outsider’s loan
Choose the correct answer from the options given below:
*2nd June, 2023*
(a) A, B and C only
(b) D and E only
(c) A, B, C and E
(d) A and B only
Q47. Identify the essential features of partnership.
(A) Agreement between persons
(B) Partners should carry some Business
(C) No restriction on the number of partners
(D) Sharing of profits/losses in agreed ratio between partners
(E) No. of partners is restricted by partnership Act-1932
Choose the correct answer from the options given below:
*7th June, 2023*
(a) (A), (C) and (E) only
(b) (A), (B) and (D) only
(c) (A), (C) and (D) only
(d) (A), (B) and (C) only
Q48. Select the conditions required for computing interest on drawings using average period method:
(A) Equal amount of drawings
(B) Fixed interval of drawings
(C) Varying amounts of drawings
(D) Different interval of drawings
(E) Rate of interest
Choose the correct answer from the options given below:
*20th May, 2023*
(a) A, D and E only
(b) A, C and B only
(c) A, C and D only
(d) A, B and E only
Q49. The content of Partnership deed includes:
(A) Name and address of all partners
(B) Method of settlement of disputes among partners
(C) Deed once made cannot be altered
(D) Rules regarding operation of Bank account
(E) Verbal agreement between partners is considered as deed
Choose the correct answer from the options given below:
*20th May, 2023*
(a) B, D and E only
(b) A, C and E only
(c) A, B and C only
(d) A, B and D only
Q50. Consider the following contents relating to the Partnership Deed.
(A) It contains the names and addresses of the firm and its main business
(B) It contains the Names and Addresses of the Directors of the firm
(C) It contains the capital to be contributed by each partner
(D) It contains the profit and loss sharing ratio
(E) It does not contains the rules regarding operation of Bank Account
Choose the correct answer from the options given below:
*26th May, 2023*
(a) (A), (C) and (D) only
(b) (A), (B), (C) and (D) only
(c) (A), (B) and (D) only
(d) (A), (C) and (E) only
Answers from Q1 to Q50 with Verification
Q1. Answer: (c) Interest on Loan from partner
- Correct – Interest on loan is a charge against profit, not an appropriation.
Q2. Answer: (d) C will be debited by ₹2,000 and A will be credited by ₹2,000
- Correct – Based on the adjustment table showing C’s debit and A’s credit.
Q3. Answer: (b) Interest on drawings
- Correct – Interest on drawings is debited to partner’s current account.
Q4. Answer: (b) ₹3,875
- Correct – Calculation: 465 = Quarterly Drawings × 4 × 8% × 4.5/12
Q5. Answer: (b) 6 months
- Correct – Standard rule when withdrawal dates are unknown.
Q6. Answer: (b) Credit
- Correct – Capital accounts always show credit balance under fixed capital method.
Q7. Answer: (a) ₹1,500
- Correct – Calculation: 7500 × 8% × 6 × 5/12 = ₹1,500
Q8. Answer: (d) Section 37
- Correct – Section 37 of Indian Partnership Act, 1932 deals with this.
Q9. Answer: (d) ₹750
- Correct – Net profit = 12,500 + 2,500 = ₹15,000; Commission = 15,000 × 5% = ₹750
Q10. Answer: (d) ₹6,000
- Correct – Calculation: 30,000 × 4 × 8% × 7.5/12 = ₹6,000
Q11. Answer: (d) Profit & Loss appropriation A/c
- Correct – This account is an extension of P&L A/c in partnerships.
Q12. Answer: (b) Debit side of Partner’s Capital A/c
- Correct – Drawings out of capital are debited to capital account.
Q13. Answer: (b) 50
- Correct – Rule 10 of Companies (Miscellaneous) Rules 2014 sets maximum 50 partners.
Q14. Answer: (a) Shanaya Capital A/c Dr. 75; Hritik Capital A/c Dr. 50; To Nawab Capital A/c 125
- Correct – Based on the adjustment calculation shown.
Q15. Answer: (d) ₹4,400
- Correct – Average period = 5.5 months; Interest = 10,000 × 12 × 8% × 5.5/12 = ₹4,400
Q16. Answer: (d) Central Government
- Correct – The limit is set by Central Government under Rule 10.
Q17. Answer: (c) On the basis of all the partners’ consent
- Correct – Partnership deed requires consent of all partners for alteration.
Q18. Answer: (b) Profit and Loss Appropriation A/c
- Correct – Partner’s salary is an appropriation of profit.
Q19. Answer: (c) Indian Companies Act 2013
- Correct – Maximum partners limit is prescribed by Companies Act, not Partnership Act.
Q20. Answer: (b) Credited ₹40,000
- Correct – Samarth was under-credited for interest on capital.
Q21. Answer: (c) ₹12,000 and ₹16,000
- Correct – Profit distributed in ratio of appropriations (15,000:20,000 = 3:4)
Q22. Answer: (c) Mutual Agency
- Correct – This describes the principle of mutual agency in partnerships.
Q23. Answer: (c) Profits and Losses are shared equally
- Correct – Default rule in absence of partnership deed.
Q24. Answer: (c) ₹5,200
- Correct – Average period = 6.5 months; Interest = 10,000 × 12 × 8% × 6.5/12 = ₹5,200
Q25. Answer: (d) ₹6,000
- Correct – Calculation shown: ₹66,000 × 10/110 = ₹6,000
Q26. Answer: (d) Provisions of the Stamp Act
- Correct – Partnership deed must comply with Stamp Act for legal validity.
Q27. Answer: (b) According to profit sharing ratio
- Correct – Losses are shared in profit sharing ratio unless otherwise agreed.
Q28. Answer: (c) Sanjay and Monika contributed ₹2,00,000 and ₹5,00,000 as capital respectively and Monika wants equal share
- Correct – In absence of deed, profits are shared equally regardless of capital.
Q29. Answer: (b) Interest on partners’ Loan is to be given @ 6% p.a.
- Correct – This is the statutory provision.
Q30. Answer: (d) No interest is to be charged
- Correct – No interest on drawings in absence of partnership deed.
Q31. Answer: (c) Equally
- Correct – Default profit sharing is equal.
Q32. Answer: (b) ₹15,000
- Correct – Commission = 1,65,000 × 10/110 = ₹15,000
Q33. Answer: (c) Unlimited Liability of Partners
- Correct – This describes unlimited liability feature.
Q34. Answer: (d) ₹3,850
- Correct – Calculation: First 8 months ₹3,400 + Last 4 months ₹450 = ₹3,850
Q35. Answer: (c) (A)-(IV), (B)-(III), (C)-(II), (D)-(I)
- Correct – Proper matching as per accounting treatment.
Q36. Answer: (d) A-III, B-II, C-IV, D-I
- Correct – Proper matching for absence of partnership deed.
Q37. Answer: (b) A-II, B-I, C-IV, D-III
- Correct – Proper matching as per partnership rules.
Q38. Answer: (a) A-IV, B-III, C-II, D-I
- Correct – Proper matching for fixed capital method.
Q39. Answer: (c) (A)-(IV), (B)-(III), (C)-(II), (D)-(I)
- Correct – Proper matching of accounts.
Q40. Answer: (d) (A)-(IV), (B)-(III), (C)-(II), (D)-(I)
- Correct – Proper matching of average periods.
Q41. Answer: (c) A-IV, B-III, C-I, D-II
- Correct – Proper matching of capital account types.
Q42. Answer: (b) (B), (C) and (E) Only
- Correct – LLP has limited liability, not governed by Partnership Act 1932.
Q43. Answer: (a) A and C only
- Correct – Only capital transactions in fixed capital account.
Q44. Answer: (d) (B), (C) and (D) Only
- Correct – These are the correct provisions in absence of deed.
Q45. Answer: (c) (B) and (E) only
- Correct – Only interest on loan @6% and equal profit sharing apply.
Q46. Answer: (a) A, B and C only
- Correct – P&L Appropriation A/c includes these items.
Q47. Answer: (b) (A), (B) and (D) only
- Correct – These are essential features of partnership.
Q48. Answer: (d) A, B and E only
- Correct – Average period method requires equal amounts, fixed intervals, and interest rate.
Q49. Answer: (d) A, B and D only
- Correct – These are typical contents of partnership deed.
Q50. Answer: (a) (A), (C) and (D) only
- Correct – Partnership deed contains these details.
Answers from Q1 to Q50 (Elaborated Answers)
S1. Ans. (c)
Sol. Interest on Loan from partner is not typically considered an item of appropriation in a partnership as it is a charge against profit and is recorded in Profit and Loss account.
S2. Ans. (d)
Sol.
| Table Showing Adjustment | A(₹) | B(₹) | C(₹) | Total(₹) |
| Interest on Drawings (Dr.) | 8,000 | 6,000 | 4,000 | 18,000 |
| ₹18,000 distributed in 5: 3: 1 (Cr.) | 10,000 | 6,000 | 2,000 | 18,000 |
| 2,000 (Cr.) | – | 2,000 (Dr.) | – |
S3. Ans. (b)
Sol. The current account of each partner is debited by the amount of interest on drawings. This is because when a partner withdraws money from the partnership as a drawing, the firm may charge interest on those drawings. This interest is debited to the partner’s current account to account for the cost of using the firm’s funds for personal purposes.
S4. Ans. (b)
Sol. Interest on Drawings = Quarterly Drawings × 4 × Rate% × Average Period
465 = Quarterly Drawings × 4 × 8/100 × 4.5/12
Quarterly Drawings = ₹3,875
S5. Ans. (b)
Sol. When the total amount withdrawn is given but the date of withdrawal is not given, the interest on drawings is charged for a period of 6 months.
S6. Ans. (b)
Sol. Under fixed capital method, capital accounts of partners will always show a Credit Balance.
S7. Ans. (a)
Sol. Since, drawings are made at the end of every two months, Average Period = 10/2 = 5 months
Interest on drawings = 7500 × 8/100 × 6 × 5/12 = ₹1,500.
S8. Ans. (d)
Sol. In the absence of any agreement, Section 37 of the Indian Partnership Act, 1932 is applicable, which states that the outgoing partner has an option to receive either interest @ 6% p.a. till the date of payment or such share of profits which has been earned with his/her money (i.e., based on capital ratio).
S9. Ans. (d)
Sol. Net profit = 12,500 + 2500 = ₹15,000
Commission paid to manager = 15,000 × 5/100 = ₹750
S10. Ans. (d)
Sol. Average Period = Months left after first drawing + Months left after last drawing = 12+3/2 = 15/2 = 7.5 months
Interest on Drawings = 30,000 × 4 × 8% × 7.5/12 = ₹6,000
S11. Ans. (d)
Sol. In the case of a partnership firm, the Profit & Loss Appropriation Account is an extension of the Profit & Loss Account (or Income Statement). It is used to allocate and distribute the net profit among the partners, including provisions for interest on capital, salaries, Commissions, and any other appropriation items as per the partnership agreement.
S12. Ans. (b)
Sol. When partners’ capital accounts are fixed, any drawings made by them out of their capital are recorded on the debit side of their Capital Accounts only. This is because fixed capital accounts represent the invested capital which should not ordinarily change except when additional capital is introduced or when capital is withdrawn. Drawings reduce the capital and hence are treated as withdrawal of capital and are therefore debited to the capital account.
S13. Ans. (b)
Sol. As per Rule 10 of the Companies (Miscellaneous) Rules 2014, the maximum number of partners allowed in a partnership firm is 50. This limitation is set to distinguish between a partnership and a company, which can have more than 50 members. The rule ensures that larger business entities operate under the more stringent regulatory framework applicable to companies.
S14. Ans. (a)
Sol. Statement showing Net effect of Omitting Interest on Drawings
| Particulars | Nawab (₹) | Shanaya (₹) | Hritik (₹) | Total (₹) |
| Amount which should have been debited by way of interest on drawings | 1,000 | 750 | 500 | 2,250 |
| Amount that should have been credited by way of share of profit | 1,125 | 675 | 450 | 2,250 |
| Required Adjustment | Cr.125 (Short) | Dr.75 (Excess) | Dr.50 (Excess) |
Journal Entry
| Particulars | Debit (₹) | Credit (₹) |
| Shanaya Capital A/c | Dr. | 75 |
| Hritik Capital A/c | Dr. | 50 |
| To Nawab Capital A/c | 125 |
Note: Interest on drawings will be calculated for an average period of 6 months.
S15. Ans. (d)
Sol. Average Period = 11+0/2 = 5.5 months.
Interest on Drawings = 10,000 × 12 × 8/100 × 5.5/12 = ₹4,400
S16. Ans. (d)
Sol. A partnership can have maximum 50 partners. According to Rule 10 of the 2014 Companies (Miscellaneous) Rules, the maximum number of partners in a firm is 50, as set forth by the Central Government.
S17. Ans. (c)
Sol. Alterations to the clauses of a partnership deed typically require the consent of all partners. This ensures that all partners agree to and are bound by the new terms of the partnership.
S18. Ans. (b)
Sol. The salary of a partner in a partnership firm is an appropriation out of profit and is shown in the Profit and Loss Appropriation Account.
S19. Ans. (c)
Sol. The Indian Companies Act, 2013 prescribes a maximum number of 100 partners for a partnership firm that is engaged in banking business, and a maximum number of 50 partners for all other types of partnership firms.
The Indian Partnership Act, 1932 does not prescribe any maximum number of partners in a partnership firm.
S20. Ans. (b)
Sol. Statement Showing Net Effect of Omitting Interest on Capital
| Particulars | Rahul’s Current A/c | Samarth’s Current A/c | Firm | |||
| Dr. | Cr. | Dr. | Cr. | Dr. | Cr. | |
| Interest on Capital which should have been credited | 80,000 | 1,00,000 | 1,80,000 | |||
| Effect of Adjustment divided in profit sharing Ratio | 1,20,000 | 60,000 | 1,80,000 | |||
| Total | 1,20,000 | 80,000 | 60,000 | 1,00,000 | 1,80,000 | 1,80,000 |
| Net effect | 40,000 (Excess) | 40,000 (Short) |
Adjustment Journal Entry
Rahul’s Current A/c Dr. 40,000
To Samarth’s Current A/c 40,000
Hence, while Passing adjustment entry, Samarth’s Current A/c will be credited by 40,000.
S21. Ans (c)
Sol.
| Rama | Shama | |
| Profit Sharing Ratio | 3/8 | 5/8 |
| Capital | 1,50,000 | 2,00,000 |
| Interest on Capital | 1,50,000 × 10% = 15,000 | 2,00,000 × 10% = 20,000 |
Net profit for the year = ₹28,000
Since, Available profit for the year is less than the appropriations, the total available net profit will be divided in the ratio of appropriations.
Total of Interest on Capital = 15,000 + 20,000 = 35,000
Rama’s ratio of Appropriations = 15000/35000 = 3/7
Rama’s Share in profit = 3/7 × 28,000 = ₹12,000
Shama’s ratio of Appropriations = 20000/35000 = 4/7
Shama’s Share in profit = 4/7 × 28,000 = ₹16,000
Hence, ₹12,000 and 16,000 is correct.
S22. Ans. (c)
Sol. Mutual Agency: Mutual agency is a legal principle that applies to partnerships. It means that each partner is an agent of the other partners and can bind the partnership to contracts. This means that if one partner enters into a contract on behalf of the partnership, the other partners are bound by the contract even if they did not agree to it. This is because each partner is deemed to have authorized the other partner to act on their behalf.
S23. Ans. (c)
Sol. In the absence of a partnership deed:
Profits and losses are shared equally among the partners.
Interest on Capital is not allowed.
Interest on drawing is not charged.
S24. Ans. (c)
Sol. Interest on Drawings = Monthly Drawings × 12 × Average Period × Rate
For Drawings at Beginning of each month
Average Period = 12+1/2 = 6.5 months
Interest on Drawings = 10,000 × 12 × 6.5 × 8/12×100 = ₹5,200
Hence, interest on drawings charged from Ajay is ₹5,200
S25. Ans. (d)
Sol. Particulars | (₹)
B’s Capital | 86,000
Less: Share in profit | 20,000
Balance (inclusive of interest on capital) | 66,000
Interest on B’s Capital = ₹66,000 × 10/110 = ₹6,000
S26. Ans. (d)
Sol. An agreement between two or more people outlining the terms and conditions of the partnership is known as a partnership deed. To give some legal documents legal validity, stamp duty is a levy that must be paid. The stamp duty that must be paid on different legal documents, including partnership deeds, in India is governed by the Indian Stamp Act. To ensure the partnership deed’s legal legitimacy, it is crucial to make sure it has been stamped in compliance with the Indian Stamp Act.
S27. Ans. (b)
Sol. In a partnership firm, partners share profit and loss in the ratio of 3:2. If the firm incurred a loss of ₹10,000 during the year, then the amount of loss to be shared by partners will be shared according to profit sharing ratio.
Hence, losses shared by the partners according to profit sharing ratio will be 6000:4000
S28. Ans. (c)
Sol. Sanjay and Monika contributed ₹2,00,000 and ₹5,00,000 as capital respectively and Monika wants equal share. This claim is valid if the partnership agreement is silent. This is because, according to Partnership Act, 1932, if the partnership deed is silent, the profits and losses are divided equally among the partners.
Also, if the partnership deed is silent, 6% interest will be provided on loans and advances provided by a partner to the firm and no salary or interest on capital is applicable.
S29. Ans. (b)
Sol. In the absence of a partnership deed, Interest on partners’ Loan is to be given @ 6% p.a.
S30. Ans. (d)
Sol. In the absence of a partnership deed, no interest is charged on the drawings of a partner. This means that partners can withdraw money from the partnership without incurring interest charges.
S31. Ans. (c)
Sol. According to the Partnership Act, if the partnership deed is silent on the profit-sharing ratio, profits are shared equally among partners. This default rule ensures fairness and simplicity in profit distribution when explicit terms are not provided.
S32. Ans. (b)
Sol. As Commission = ₹1,65,000 × 10/110 = ₹15,000
S33. Ans. (c)
Sol. The feature of partnership highlighted is “Unlimited Liability of Partners.” In a partnership, partners are personally liable for the firm’s debts, which means their personal assets can be used to pay off firm debts if the firm’s assets are insufficient.
S34. Ans. (d)
Sol. Interest on drawings of first 8 months drawings:
Average Period = 12+5/2 = 8.5 months
Interest on Drawings = 10,000 × 8 × 6/100 × 8.5/12 = ₹3,400
Interest on drawings of last 4 months drawings:
Average Period = 4-1/2 = 1.5 months
Interest on Drawings = 15,000 × 4 × 6/100 × 1.5/12 = ₹450
Total Interest on drawings = ₹3,400 + ₹450 = ₹3,850
S35. Ans. (c)
Sol. (A) Interest on partner’s loan: This is an expense item that is typically recorded in the Profit and Loss Account as it represents an outgoing payment.
(B) Personal account: Personal accounts represent the accounts of individuals or entities and are recorded in the Capital Account, reflecting their financial position in the business.
(C) Position statement: A Position Statement is another term for the Balance Sheet, which provides a snapshot of a company’s financial position, including assets and liabilities.
(D) Commission to a partner: Commission to a partner is typically recorded in the Profit and Loss Appropriation Account as it’s part of the distribution of profits among the partners.
S36. Ans. (d)
Sol.
| LIST I | LIST II |
| A. Interest on loan | III. @6% p.a. |
| B. Interest on drawings | II. Will not be charged |
| C. Salary | IV. Will not be allowed/provided |
| D. Profit sharing ratio | I. Equal |
S37. Ans. (b)
Sol.
| LIST – I | LIST – II |
| (A) Interest on Advances by partner | (II) 6% p.a. |
| (B) Interest on Drawings | (I) Not charged |
| (C) Interest on capital | (IV) Not allowed |
| (D) Profit sharing ratio | (III) Equal |
S38. Ans. (a)
Sol.
| LIST – I | LIST – II |
| A. Additional capital introduced | IV. Credit side of partner capital account |
| B. Withdrawal of capital | III. Debit side of partner capital account |
| C. Drawings | II. Debit side of current account |
| D. Salary payable to partner | I. Credit side of current account |
S39. Ans. (c)
Sol.
| LIST-I | LIST-II |
| (A) Salary to partner | (IV) Credit side of Partner’s Current Account |
| (B) Interest on partner’s loan | (III) Debit side of Profit and Loss Account |
| (C) Interest on partner’s drawings | (II) Debit side of Partner’s Current Account |
| (D) Additional capital introduced | (I) Credit side of Partner’s Capital Account |
S40. Ans. (d)
Sol.
| LIST-I | LIST-II |
| (A) At the end of each half year | (IV) 3 months |
| (B) At the beginning of each quarter | (III) 7.5 months |
| (C) At the beginning of each month | (II) 6.5 months |
| (D) At the end of each quarter | (I) 4.5 months |
S41. Ans. (c)
Sol.
| LIST – I | LIST – II |
| A. Only Capital A/c exist | IV. Fluctuating Capital Account |
| B. Capital account balance remain unchanged | III. Fixed Capital Account |
| C. Fresh/additional capital brought in by partner | I. Credited to partners’ capital account |
| D. Permanent withdrawal | II. Debited to Partner’s Capital Account |
S42. Ans. (b)
Sol. The statements not true regarding the Limited liability partnership.
(B) Unlimited liability for one partner
(C) Indian Partnership Act, 1932 is applicable
(E) Unlimited liability of partners
S43. Ans. (a)
Sol. A. Withdrawal of capital: Withdrawals of capital by partners are recorded in their respective capital accounts. This reflects when partners take out their initial capital investments.
C. Additional Capital: Any additional capital contributed by partners is also recorded in their capital accounts. This includes when partners invest more money into the partnership.
S44. Ans. (d)
Sol. In the absence of a partnership deed, the following statements are correct:
(B) No interest on capital will be provided.
(C) No interest on Drawing will be charged.
(D) 6% p.a. interest on partner’s loan will be provided.
S45. Ans. (c)
Sol. In the absence of partnership deed:
(B) Partners are allowed interest on loan advanced by them @ 6% p.a.
(E) Profits are shared in equal ratio.
S46. Ans. (a)
Sol. Profit and Loss Appropriation Account includes:
A. Interest on capital: This represents the interest paid to partners on their capital investments in the business.
B. Interest on drawing: This accounts for any interest charged on partners’ drawings if applicable.
C. Partner’s salary: This reflects any salaries or remuneration paid to partners as part of the profit-sharing arrangement.
S47. Ans. (b)
Sol. The essential features of a partnership are:
A. Agreement between persons: Partnership is formed through a mutual agreement or contract between two or more individuals who agree to carry on a business together.
B. Partners should carry some Business: Partnerships are formed with the intention of carrying on a business activity. Each partner is actively involved in the business operations.
D. Sharing of profits/losses in agreed ratio between partners: In a partnership, the partners agree on how the profits and losses of the business will be shared among them. This agreed-upon ratio is a fundamental aspect of the partnership agreement.
S48. Ans. (d)
Sol. The conditions required for computing interest on drawings using the average period method are:
(A) Equal amount of drawings
(B) Fixed interval of drawings
(E) Rate of Interest
S49. Ans. (d)
Sol. A typical partnership deed includes the name and address of all partners, the method of settlement of disputes among partners, and rules regarding the operation of the bank account.
S50. Ans. (a)
Sol. A partnership deed typically includes:
(A) Names and addresses of the firm and its main business.
(C) Capital to be contributed by each partner
(D) Profit and loss sharing ratio. It does not usually include the names and addresses of directors, as partnerships don’t have directors, nor does it explicitly discuss rules regarding the operation of bank accounts.
For comprehensive coaching and guidance in the CUET 2026 Commerce Domain subjects including Accountancy, Business Studies, Economics, and Applied Mathematics. You can contact Sahoo Sir. To secure excellent marks in these subjects, you may reach him on WhatsApp at 9899808330 or call him for personalised guidance.
S.S. Sahoo (Sahoo Sir) conducts both in person and online classes for CUET Commerce Domain subjects. His coaching centre is located at Sector A, Pocket C, Vasant Kunj, New Delhi – 110070. You can also call for details regarding online coaching and support.
