Partnership accounts MCQs
New investment by any partner in the partnership type of business is _______ to the partner’s capital account
A) DebitedWRONG ANSWER
B) CreditedRIGHT ANSWER!!!
Under fluctuation method of capital, what is the treatment of “interest on capital”?
A) Credited to capital account RIGHT ANSWER!!!
B) Debited to capital account WRONG ANSWER
C) No treatment or adjustment needed WRONG ANSWER
D) Credited to current account WRONG ANSWER
Which of the following is NOT generally the characteristic of a partnership business?
A) Limited lifeWRONG ANSWER
B) Ease of formationWRONG ANSWER
C) Mutual agency WRONG ANSWER
D) Limited liability RIGHT ANSWER!!!
In which of the following types of partnership the liability of at least one partner is unlimited whereas the liability of other partners is limited?
A) General partnershipWRONG ANSWER
B) Particular partnership WRONG ANSWER
C) Partnership-at-will WRONG ANSWER
D) Limited partnership RIGHT ANSWER!!!
In which of the following types of partnership there is no agreement regarding the duration of partnership?
A) General partnership WRONG ANSWER
B) Partnership-at-will RIGHT ANSWER!!!
C) Limited partnership WRONG ANSWER
D) Registered partnership WRONG ANSWER
A&B are partners sharing profit or loss equally. A new partner enters in the partnership and invests a piece of land that had historical cost of $50,000, book value = $25000 and current market value = $30,000. By what amount the new partner’s account should be increased?
A) $25000WRONG ANSWER
B) $50,000 WRONG ANSWER
C) $30,000RIGHT ANSWER!!!
D) $75000 WRONG ANSWER
X and Y are partners sharing profit and loss at the ratio of 1/3 and 2/3 respectively. The net income for this accounting period is $10 while salary of X = $2, interest on Y’s drawings = $3 and interest on X’s capital = $2. 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) $3RIGHT ANSWER!!!
B) $6WRONG ANSWER
C) $9WRONG ANSWER
D) $11WRONG ANSWER
Which of the following is known as the value addition to a business because of business reputation, customers’ loyalty, brand name etc
A) AssetsWRONG ANSWER
B) Market capitalizationWRONG ANSWER
C) GoodwillRIGHT ANSWER!!!
D) Market penetrationWRONG ANSWER
Which of following is the correct double entry for revaluation surplus
A) Revaluation = Debit and Partners capital accounts = Credit RIGHT ANSWER!!!
B) Partners capital accounts = Debit and Revaluation surplus = Credit WRONG ANSWER
A and B share profit and loss in the ratio of 3/5 and 2/5 respectively and having capital account balances of $100,000 each. At the time of revaluation, the firm’s total asset book value was $60,000 while they can only be sold for $40,000. Which of the following is the balance of A’s capital account after revaluation of firm’s assets?
A) $100,000WRONG ANSWER
B) $112,000WRONG ANSWER
C) $88,000RIGHT ANSWER!!!
D) $72,000WRONG ANSWER