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12th Accountancy - Accounts of Partnership Firms-Fundamentals Practice Question Paper

Published on: 04/01/2020

Accounts of Partnership Firms-Fundamentals

Download Tamil Nadu 12th Standard Accountancy question papers, model tests, one-mark questions, important questions, and public exam papers in PDF format. Free study materials and answer keys for TN State Board students.

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Questions:

Generic 5

3 x 5 = 15

Durga and Preethi entered into a partnership agreement on 1st April 2018, Durga contributing Rs.50,000 and Preethi Rs.60,000 as capital. The agreement provided that:
(a) Profits and losses to be shared in the ratio 3:2 as between Durga and Preethi.
(b) Partners to be entitled to interest on capital @ 5% p.a.
(c) Interest on drawings to be charged Durga Rs.600 Velan Rs.900
(d) Durga to receive a salary Rs.10,000 for the year and
(e) Preethi to receive a commission of Rs.4,000 During the year, the firm made a profit of Rs.40,000 before adjustment of interest, salary and commission prepare the profit and loss appropriation account.

Arulappan and Nallasamy are partners in a firm sharing profits and losses in the ratio of 4:1. On 1st January 2018, their capitals were Rs. 20,000 and Rs. 10,000 respectively. The partnership deed specifies the following:
(a) Interest on capital is to be allowed at 5% per annum.
(b) Interest on drawings charged to Arulappan and Nallasamy are Rs. 200 and Rs. 300 respectively.
(c) The net profit of the firm before considering interest on capital and interest on drawings amounted to Rs. 18,000.
Give necessary journal entries and prepare Profit and loss appropriation account for the year ending 31st December 2018. Assume that the capitals are fluctuating.

From the following information, prepare capital accounts of partners Shanthi and Sumathi, when their capitals are fixed.

Particulars	Shanthi Rs.	Sumathi Rs.
Capital on 1^st January 2	1,00,000	80,000
Current account on 1^st January 2018 (Cr.)	5,000	3,000
Additional capital introduced on 1^st June 2018	10,000	20,000
Drawings during 2018	20,000	13,000
Interest on drawings	500	300
Share of profit for 20	10,000	8,000
Interest on capital	6,300	5,400
Salary	9,000	Nil
Commission	Nil	1,200

Generic 2

4 x 2 = 8

If the partner's capital accounts are fixed, where will you record the following items?
(a) Salary payable to a partner
(b) Drawings made by a partner

Ram and Shyam were partners. Ram withdrew Rs. 18,000 at the beginning of each half year. Interest on drawings is chargeable @ 10% p.a. Calculate interest on the drawings for the year ending 31st December 2018 using average period.

What is the journal entry to be passed for providing interest on capital to a partner?

Rajan is a partner who withdrew Rs. 30,000 during the year 2018. Interest on drawings is charged at 10% per annum. Calculate interest on drawings on 31st December, 2018.

Multiple Choice Question

6 x 1 = 6

Indian partnership Act was enacted in the year ___________

(a)

1932

(b)

1956

(c)

1991

(d)

1992

___________ is a document in writing that contains the terms of the agreement among the partners.

(a)

Partnership deed

(b)

Partnership at will

(c)

Both 'a' and 'b'

(d)

None of these

10.

Amount is drawn regularly at the middle of every month during the year. Interest calculated for ___________

(a)

\(\frac{13}{24}\)

(b)

\(\frac{11}{24}\)

(c)

\(\frac{12}{24}\)

(d)

\(\frac{10}{24}\)

11.

In a partnership business, agreement is ___________

(a)

compulsory

(b)

optional

(c)

not necessary

(d)

none of these

12.

The profit or loss arising from the partnership business is shared by the partners in the ___________

(a)

old ratio

(b)

new ratio

(c)

agreed ratio

(d)

sacrifice ratio

13.

As per the Indian Partnership Act, 1932, the rate of interest allowed on loans advanced by partners is

(a)

8% per annum

(b)

12% per annum

(c)

5% per annum

(d)

6% per annum

Generic 3

2 x 3 = 6

14.

The firm of A and B earned a profit of Rs.2,75,000 during the year ending on 31st March, 2015. They have decided to donate 10% of this profit to an NGO working for senior citizens. Pass necessary journal entry for the distribution of profits. Identify the values shown by the firm in donating a part of profit of NGO.

15.

From the following balance sheets of Subha and Sudha who share profits and losses in 2 : 3, calculate interest on capital at 5% p.a. for the year ending 31st December, 20

**Balance sheet as on 31st December, 2018**
Liabilities	Rs.	Rs.	Assets	Rs.
Capital accounts			Fixed assets	70,000
Subha	40,000		Current assets	60,000
Sudha	60,000	1,00,000
Current liabilities		30,000
		1,30,000		1,30,000

Drawings of Subha and Sudha during the year were Rs. 8,000 and Rs. 10,000 respectively. Profit earned during the year was Rs. 30,000

Odd one out

1 x 2 = 2

16.

(a) Remuneration to partners
(b) Fixed capital method
(c) Interest on capital
(d) Interest on drawings

Find out the wrong pair

1 x 2 = 2

17.

(a)	Average period at the end	\(\frac{11}{2}\)
(b)	Average period in the middle	\(\frac{12}{2}\)
(c)	Average period of Quarterly at the end	\(\frac{6}{2}\)
(d)	Average period at the beginning	\(\frac{13}{2}\)

Assertion and reason

1 x 2 = 2

18.

Assertion (A): A partnership deed covers all matters relating to mutual relationship among the partners.
Reason (R): But, in the absence of agreement, the following provisions of the Indian Partnership Act, 1936 shall apply for accounting purposes.
(a) Both (A) and (R) are true and (R) is the correct explanation of (A).
(b) Both (A) and (R) are true and (R) is not the correct explanation of (A).
(c) (A) is true, but (R) is false
(d) (A) is false, but (R) is true

One or Two Words / Correct Statement

1 x 1 = 1

19.

(i) Current accounts of the partners should be opened when the capitals are Either fixed or fluctuating.
(ii) Goodwill is the present value of a firm's anticipated excess earnings in future and the efforts had already made in the past.
(iii) Any partner who investments 'in the business but does not take active part in the business is Nominal partner
(a) (ii) and (iii) are correct
(b) (i) and (ii) are correct
(c) (ii) is correct
(d) (i), (ii) and (iii) are correct

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Answers Key:

Generic 5

3 x 5 = 15

Profit and loss appropriation accounts for the year ended 31^st March 2019

Dr Cr
Particulars	Rs.	Rs.	Particulars	Rs.
To Interest on capital AI c			By Profit and loss AI c	40,000
Durga (50,000 x 5/100)		2,500	By Interest on drawings A/c
Preethi (60,000 x 5/100)		3,000
To Salary Durga		10,000	Durga	600
To Commission to Preethi A/c		4,000	Preethi	900
To Partner's capital A/c
To Partner's capital A/c (Profit transferred)
Durga (22,000 x 3/5)	13,200
Preethi (22,000 x 2/5)	8,800	22,000
		41,500		41,500

**Journal entries**
Date	Particulars		Dr. Rs.	Cr. Rs
2018	Interest on capital A/c	Dr.	1,500
Dec. 31	To Arulappan’s capital A/c			1,000
	To Nallasamy’s capital A/c (Interest on capital @ 5% provided)			500
"	Profit and loss appropriation A/c	Dr.	1,500
	To Interest on capital A/c (Interest on capital account closed)			1,500
'	Arulappan’s capital A/c	Dr.	200
	Nallasamy’s capital A/c	Dr.	300
	To Interest on drawings A/c (Interest on drawings charged)			500
"	Interest on drawings A/c	Dr.	500
	To Profit and loss appropriation A/c (Interest on drawings account closed)			500
"	Profit and loss appropriation A/c Dr.		17,000
	To Arulappan’s capital A/c			13,600
	To Nallasamy’s capital A/c (Profit transferred)			3,400

**Dr. Profit and loss appropriation account for the year ended 31st December 2018 Cr.**
Particulars	Rs.	Rs.	Particulars	Rs.
To Interest on capital			By Profit and loss A/c	18,000
Arulappan		1,000	By Interest on drawings A/c
Nallasamy		500	Arulappan	200
To Partners’ capital A/c (profit)			Nallasamy	300
Arulappan (4/5)	13,600	17,000
Nallasamy (1/5)	3,400	18,500		18,500

**Dr. Partners’ Capital Account Cr.**
Date	Particulars	Shanthi Rs.	Sumathi Rs.	Date	Particulars	Shanthi Rs.	Sumathi Rs.
2018				2018
				Jan 1	By Balance b/d	1,00,000	80,000
Dec 31	To Balance c/d	1,10,000	1,00,000	June 1	By Bank (Additional capital)	10,000	20,000
		1,10,000	1,00,000			1,10,000	1,00,000
				2019
				Jan 1	By Balance b/d	1,10,000	1,00,000

**Dr. Partners’ Current Account Cr.**
Particulars	Shanthi Rs.	Sumathi Rs.	Particulars	Shanthi Rs.	Sumathi Rs.
To Drawings	20,000	13,000	By Balance b/d	5,000	3,000
To Interest on			By Profit and loss
	500	300
drawings			appropriation A/c	10,000	8,000
To Balance c/d	9,800	4,300	(share of profit)
			By Interest on capital	6,300	5,400
			By Salary	9,000	-
			By Commission	-	1,200
	30,300	17,600		30,300	17,600
			By Balance b/d	9,800	4,300

Generic 2

4 x 2 = 8

(a) Under fixed capital method, salary payable to a partner is recorded in the current account
(b) Under fixed capital method, drawings made by a partner is recorded in the current account.

Calculation of interest on drawings of Ram (using average period)
Total amount of drawings = 18,000 \(\times\) 2 = Rs. 36,000
If drawings are made at the end of every half year, average period = 9
Interest on drawings = Total amount of drawings \(\times\) Rate of interest \(\times\) \(\frac{Average \ period}{12}\)
= Rs. 36000 \(\times\) \(\frac{10}{100}\times\frac{9}{12}\)
= Rs. 2,700

Following are the journal entries to be made in the books of the partnership firm.
a. For providing interest on capital:

Date	Particulars	L.F	Debit Rs.	Credit Rs.
	Interest on capital A/c Dr		XXXX
	To partner's capital I currentA/c			XXXXX

b. For closing interest on capital account:

Date	Particulars	L.F	Debit Rs.	Credit Rs.
	Profit and loss appropriation A/c Dr		XXXX
	To Interest on Capital A/c			XXXXX

Interest on Drawings = 30,000 \(\times\) \(\frac { 10 }{ 100 } \times \frac { 6 }{ 12 } \) = Rs. 1,500

Multiple Choice Question

6 x 1 = 6

(b)
1956

(a)
Partnership deed

10.

11.

(b)
optional

12.

13.

(d)
6% per annum

Generic 3

2 x 3 = 6

14.

Journal entry
Particulars	Debit Rs.	Credit Rs.
Profit and loss appropriation A/c Dr	2,47,500
To A's capital A/c		1,23,750
To A's capital A/c (Being profit transferred to capital account)		1,23,750

Values shown by the firm are
i. Responsibility :
Firm has shown responsibility towards senior citizens by giving them their dues.
ii. Compassion:
Partners have shown compassion towards senior citizens by fulfilling their duties towards senior citizens .

15.

Particulars	Subha Rs.	Sudha Rs.
Capital on 31^st December 2018	40,000	60,000
Add: Drawings	8,000	10,000
	48,000	70,000
Less: Profit already creditted	12,000	18,000
Capital on 1^st January 2019	36,000	52,000

Calculation of interest on capital:
Subha:
On opening capital = 36,000 \(\times\) \(\frac{5}{100}\) = Rs. 1,800
Sudha:
On opening capital = 52,000 \(\times\) \(\frac{5}{100}\) = Rs. 2,600

Odd one out

1 x 2 = 2

16.

(b) Fixed capital method

Find out the wrong pair

1 x 2 = 2

17.

Assertion and reason

1 x 2 = 2

18.

(d) (A) is false, but (R) is true

One or Two Words / Correct Statement