Short Answer Questions
Question 1. Mention any four provisions of the partnership Act, in the absence of Partnership Deed.
Solution 1.
1.) Sharing of Profit/Losses:- Profit/Losses are shared equally by the partners.
2.) Interest on Capital:- Interest on capital is not paid to partners.
3.) Interest on Drawings:- Interest on drawings in not charged from partners.
4.) Interest on Loan:- Interest at the rate of 6% p.a. is to be allowed on a partner’s loan to the firm. Such interest shall be paid even if there are losses to the firm.
Question 2. State four important points which must be incorporated in a Partnership Deed.
Solution 2.
Below are the provisions of the partnership Act, in the absence of Partnership Deed:-
1.) If all the partners agree, a minor may be admitted for the benefit of partnership.
2.) A person may be admitted as a partner either with the consent of all the existing partners or in accordance with an express agreement among the partners.
3.) Registration of the firm is optional and not compulsory.
4.) A partner may retire from the firm either with the consent of all the other partners or in accordance with an express agreement among the partners.
Question 3. Name any six items which are shown in ‘Profit and Loss Appropriation Account’.
Solution 3.
1.) Salaries of Partners
2.) Commission of Partners
3.) Interest on Partners Capital
4.) Interest on Partners Drawings
5.) Profit transferred to Capital account
6.) Net Profit transferred from P&L account
Question 4. Mention difference between the following:-
(a) Fixed Capitals and Fluctuating Capitals.
(b) Partner’s Capital Accounts and Current Accounts.
Solution 4.