Partnership Final Accounts

1. Gross Profit is transferred to _______________ Account.

a. Trading   

b. Profit and Loss   

c. Partner's capital         

d. Balance sheet.

2. Debit balance of current account of a partner appears on _________________ side of balance sheet.

a. liability    

b. asset        

c. debit        

d. credit

3. _______________ is a statement of balances of ledger accounts.

a. statement of affairs     

b. trial balance      

c. final account      

d. balance sheet

4. In the absence of partnership deed the partners share profits and losses in the __________ ratio.

a. agreed      

b. equal       

c. capital     

d. initial contribution

5. The interest on capital of a partner is debited to ______________ account.

a. Trading    

b. profit and loss    

c. Partner's capital          

d. Bank

6. Income received in advance is shown on _____________ side of balance sheet.

a. asset        

b. liability    

c. debit        

d. credit

7. A provision made for debts irrecoverable from the debtors is called ________

a. bad debts           

b. Reserve for doubtful debts     

c. reserve for discount on debtors        

d. reserve for discount on creditors.

8. Prepaid expenses/ payment made in advance  are shown on the _________ side of the Balance sheet.

a. debit

b. credit

c. asset

d. laibility

9. Wages paid for installation of machinery should be debited to _____________ A/c

a. wages

b. machinery

c. trading

d. profit and loss

10. Expenditure on purchase of a building is a __________________

a. revenue

b. capital

c. recurring

d. genera. 

Select the most appropriate alternative from those given below

NOT FOR PROFIT CONCERNS

DISSOLUTION OF PARTNERSHIP FIRM

DEATH OF PARTNER

RETIREMENT OF PARTNERS

ADMISSION OF PARTNERS

PARTNERSHIP FINAL ACCOUNTS

ANALYSIS OF FINANCIAL STATEMENTS

ACCOUNTING FOR DEBENTURES

ACCOUNTING FOR SHARES

BILL OF EXCHANGE

SINGLE ENTRY ACCOUNTING SYSTEM

ACCOUNTS ANSWER IN ONE SENTENCE

1. What is partnership?

Ans. Partnership is a form of business organisation in which two or more persons enter into an agreement, contribute certain capital, undertake certain lawful business to earn profit and share the profits or losses in agreed proportion.

2. What is partnership deed?

Ans.  A partnership deed is a written agreement duly stamped and signed document containing the terms and conditions of the partnership.

3. State the meaning of a Balance Sheet.

Ans. A balance sheet is a statement showing the financial position of the business in the form of its assets and liability on a particular date.

4. When are partners’ current accounts opened?

Ans. When partnership form adopts fixed capital method, it opens partners’ current accounts to record dealing of partners with partnership firm.

5. Write the meaning of bad debts?

Ans. The debt or its part which cannot be recovered from a debtor is called bad debts.

6. State the meaning of closing stock.

Ans. The unsold goods remained in the business at the end of the accounting year is known as closing stock.

7. How is closing stock valued?

Ans. Closing stock is valued at cost price or market price whichever is less.

8. What is Trial Balance?

Ans. Trial balance is a statement showing the list debit and credit balances of all the ledger accounts on a particular date.

9.What do you mean by Fluctuating Capital Method?

Ans. Fluctuating capital method is one in which capital balances of the partners go on changing every year due to entries for adjustments like drawings, interest on capital and drawings, salaries, commission, allowances, etc. Recorded in their capital accounts.

10. If the partnership deed is silent, what is the profit sharing of the partners?

Ans. If the partnership deed is silent, partners will share profits and losses in equal ratio.

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