Students of class 12 Accountancy should refer to MCQ Questions Class 12 Accountancy Accounting for Partnership Basic Concepts with answers provided here which is an important chapter in Class 12 Accountancy NCERT textbook. These Multiple Choice Questions have been prepared based on the latest CBSE and NCERT syllabus for Class 12 Accounts. The following MCQs can help you to practice and get better marks in the upcoming class 12 accountancy examination

Question: Features of a partnership firm are :
(A) Two or more persons are carrying common business under an agreement.
(B) They are sharing profits and losses in the fixed ratio.
(C) Business is carried by all or any of them acting tor all as an agent.
(D) All of the above.

Question: Ostensible partners are those who
A) do not contribute any capital but get some share of profit for lending their name to the business
B) contribute very less capital but get equal profit
C) do not contribute any capital and without having any interest in the business, lend their name to the business
(D) contribute maximum capital of the business

Question. When only Partner‘s capital Account is maintained all the adjustments are made :
(a) Partners’ Capital Accounts
(b) Partners’ Current Accounts
(c) Cash Account
(d) None of these 

Question. The persons who have entered into partnership are individually known as :
(a) Partners
(b) Firm
(c) Associations
(d) None of these

Question: Which one of the following is NOT an essential feature of a partnership
(A) There must be an agreement
(B) There must be a business
(C) The business must be carried on for profits
(D) The business must be carried on by all the partners

Question. In the absence of partnership deed, partners share profits or losses :   
(A) In the ratio of their Capitals
(B) In the ratio decided by the court
(C) Equally
(D) In the ratio of time devoted

Question. Select the Best Alternate Answer. (i) Features or Characteristics of Partnership 1. Features of a partnership firm are :   
(A) Two or more persons are carrying common business under an agreement.
(B) They are sharing profits and losses in the fixed ratio.
(C) Business is carried by all or any of them acting tor all as an agent.
(D) All of the above.

Question. In the absence of agreement, partners are not entitled to :   
(A) Salary
(B) Commission
(C) Equal share in profit
(D) Both (a) and (b)

Question. In case of partnership the act of any partner is :     
(A) Binding on all partners
(B) Binding on that partner only
(C) Binding on all partners except that particular partner
(D) None of the above

Question. A and B are partners in a partnership firm without any agreement. A devotes more time for the firm as compare to B. A will get the following commission in addition to profit in the firm’s profit:   
(A) 6% of profit
(B) 4% of profit
(C) 5% of profit
(D) None of the above

Question. Is rent paid to a partner appropriation of profits   
(A) It is appropriation of profit
(B) It is not appropriation of profit
(C) If partner’s contribution as capital is maximum
(D) If partner is a working partner.

Question. What should be the minimum number of persons to form a Partnership :   
(A) 2
(B) 7
(C) 10
(D) 20

Question. Which one of the following is NOT an essential feature of a partnership   
(A) There must be an agreement
(B) There must be a business
(C) The business must be carried on for profits
(D) The business must be carried on by all the partners

Question. If any loan or advance is provided by partner then, balance of such Loan Account should be transferred to :   
(A) B/S Assets side
(B) B/S Liability Side
(C) Partner’s Capital A/c
(D) Partner’s Current A/c

Question. A, B and C Were Partners with capitals of ₹50,000; ₹40,000 and RS 30,000 respectively carrying on business in partnership. The firm’s reported profit for the year was ₹80,000. As per provision of the Indian Partnership Act, 1932, find out the share of each partner in the above amount after taking into account that no interest has been provided on an advance by A of ₹20,000 in addition to his capital contribution.       
(A) ₹26,267 for Partner B and C and ₹27,466 for Partner A.
(B) ₹26,667 each partner.
(C) ₹33,333 for A ₹26,667 for B and ₹20,000 for C.
(D) ₹30,000 each partner.

Question, Liability of partner is :     
(A) Limited
(B) Unlimited
(C) Determined by Court
(D) Determined by Partnership Act

Question. X, Y, and Z are partners in a firm. At the time of division of profit for the year, there was dispute between the partners. Profit before interest on partner’s capital was ₹6,00,000 and Z demanded minimum profit of ₹5,00,000 as his financial position was not good. However, there was no written agreement on this point.   
(A) Other partners will pay Z the minimum profit and will share the loss equally.
(B) Other partners will pay Z the minimum profit and will share the loss in capital ratio.
(C) Xand T will take ₹50,000 each and Z will take ₹5,00,000.
(D) ₹2,00,000 to each of the partners.

Question. A partner introduced additional capital of ₹30,000 and advanced a loan of ₹40,000 to the firm at the beginning of the year. Partner will receive year’s interest:   
(A) ₹4,200
(B) ₹2,400
(C) Nil
(D) ₹1,800

Question. Which of the following statement is true   
(A) a minor cannot be admitted as a partner
(B) a minor can be admitted as a partner, only into the benefits of the partnership
(C) a minor can be admitted as a partner but his rights and liabilities are same of adult partner
(D) none of the

Question. In the absence of express agreement, interest @ 6% p.a. is provided :   
(A) On opening balance of partner’s capital accounts
(B) On closing balance of partner’s capital accounts
(C) On loan given by partners to the firm
(D) On opening balance of partner’s current accounts

Question. Which one of the following items cannot be recorded in the profit and loss appropriation account   
(A) Interest on capital
(B) Interest on drawings
(C) Rent paid to partners
(D) Partner’s salary

Question. Number of partners in a partnership firm may be :     
(A) Maximum Two
(B) Maximum Ten
(C) Maximum One Hundred
(D) Maximum Fifty

Question. Which of the following items are recorded in the Profit & Loss Appropriation Account of a partnership firm   
(A) Interest on Capital
(B) Salary to Partner
(C) Transfer to Reserve
(D) All of the above

Question. X, Y, and Z are partners in a firm. At the time of division of profit for the year, there was dispute between the partners. .Profit before interest on partner’s capital was ₹6,000 and Y determined interest @24% p.a. on his loan of ₹80,000. There was no agreement on this point. Calculate the amount payable to X, Y, and Z respectively.   
(A) ₹2,000 to each partner.
(B) Loss of ₹4,400 for X and Z; Twill take ₹14,800.
(C) ₹400 for A, ₹5,200 for Land ₹400 for Z.
(D) None of the above.

Question. Interest on capital will be paid to the partners if provided for in the partnership deed but only out of:   
(A) Profits
(B) Reserves
(C) Accumulated Profits
(D) Goodwill

Question. Goodwill is a _ Asset.
(A) Tangible
(B) Intangible
(C) Not an asset
(D) None of these 

Question: When is the Partnership Act enforced
(A) when there is no partnership deed
(B) where there is a partnership deed but there are differences of opinion between the partners
(C) when capital contribution by the partners varies
(D) when the partner’s salary and interest on capital are not incorporated in the partnership deed

Question. The Agreement of Partnership may be :
(A) Oral
(B) Written
(C) Both (a) and (b)
(D) None of these 

Question: Interest on capital will be paid to the partners if provided for in the partnership deed but only out of:
(A) Profits
(B) Reserves
(C) Accumulated Profits
(D) Goodwill

Question. Partners’ Current Accounts are opened when their Capital Accounts are :
(A) Fixed
(B) Fixed and Fluctuating
(C) Fluctuating
(D) None of these

Question: X, Y, and Z are partners in a firm. At the time of division of profit for the year, there was dispute between the partners. .Profit before interest on partner’s capital was ₹6,000 and Y determined interest @24% p.a. on his loan of ₹80,000. There was no agreement on this point. Calculate the amount payable to X, Y, and Z respectively.
(A) ₹2,000 to each partner.
(B) Loss of ₹4,400 for X and Z; Twill take ₹14,800.
(C) ₹400 for A, ₹5,200 for Land ₹400 for Z.
(D) None of the above.

Question: On 1st January 2019, a partner advanced a loan of ₹1,00,000 to the firm. In the absence of agreement, interest on loan on 31st March 2019 will be :
(A) Nil
(B) ₹1,500
(C) ₹3,000
(D) ₹6,000

Question. Intangible Assets ( Goodwill ) has been defined in :
(A) AS 16
(B) AS 20
(C) AS 26
(D) AS 21 

Question: A, B and C are partners. A’s capital is ₹3,00,000 and B’s capital is ₹1,00,000. C has not invested any amount as capital but he alone manages the whole business. C wants RS30,000 p.a. as salary. Firm earned a profit of ₹1,50,000. How much will be each partner’s share of profit:
(A) A ₹60,000; B ₹60,000; C ₹Nil
(B) A ₹90,000; B ₹30,000; C ₹Nil
(C) A ₹40,000; B ₹40,000 and C ₹40,000
(D) A ₹50,000; B ₹50,000 and C ₹50,000.

Question: Seeta and Geeta are partners sharing profits and losses in the ratio 4 : 1. Meeta was manager who received the salary of ₹4,000 p.m. in addition to a commission of 5% on net profits after charging such commission. Profit for the year is ₹6,78,000 before charging salary. Find the total remuneration of Meeta.
(A) ₹78,000
(B) ₹88,000
(C) ₹87,000
(D) ₹76,000

Question: If the Partners’ Capital Accounts are fixed ‘salary payable to partner’will be recorded :
(A) On the debit side of Partners’ Current Account
(B) On the debit side of Partners’ Capital Account
(C) On the credit side of Partners’ Current Account
(D) None of the above

Question: Interest on Partner’s drawings will be debited to :
(A) Profit and Loss Account
(B) Profit and Loss Appropriation Account
(C) Partner’s Current Account
(D) Interest Account

Question: Where will you record interest on drawings :
(A) Debit Side of Profit & Loss Appropriation Account
(B) Credit Side of Profit & Loss Appropriation Account
(C) Credit Side of Profit & Loss Account
(D) Debit Side of Capital/Current Account only

Question: If a fixed amount is withdrawn by a partner in the middle of every month, interest on the total amount is charged for …………… months
(A) 6
(B) 6 1/2
(C) 5 1/2
(D) 12

Question: If a fixed amount is withdrawn by a partner in each quarter, interest on the total amount is charged for ……………….. months
(A) 3
(B) 6
(C) 4.5
(D) 7.5

Question: Charulata is a partner in a firm. She withdrew ₹10,000 in each quarter during the year ended 31st March, 2019. Interest on her drawings @ 9% p.a. will be:
(A) ₹1,350
(B) ₹2,250
(C) ₹900
(D) ₹1,800

Question: In the absence of express agreement, interest @ 6% p.a. is provided :
(A) On opening balance of partner’s capital accounts
(B) On closing balance of partner’s capital accounts
(C) On loan given by partners to the firm
(D) On opening balance of partner’s current accounts

Question: A and B are partners. According to Profit and Loss Account, the net profit for the year is ₹2,00,000. The total interest on partner’s drawings is ₹1,000. As salary is ₹40,000 per year and B’s salary is ₹3,000 per month. The net profit as per Profit and Loss Appropriation Account will be :
(A) ₹1,23,000
(B) ₹1,25,000
(C) ₹1,56,000
(D) ₹1,58,000

Fill in the blanks :

Question. The maximum number of Partners allowed in a partnership firm are __

Question. A, B and C decided that interest on capital will be provided to each partner @ 5% p.a. But after one year, C wants that no interest on capital is to be provided to any partner. State how C can do this.

Question. The minimum number of partners allowed to open a partnership firm are __ 

One Word / Sentence Answers:

Question. Six friends started a partnership business by investing ` 2,00,000 each. They decided to share profits equally. Name the terms by which they will be called individually and collectively. 

Question. Name the method of calculating interest on drawings of the partner if different amounts are withdrawn on different dates.

Question. Ritesh and Hitesh are childhood friends. Ritesh is a consultant whereas Hitesh is an architect. They contributed equal amounts and purchased a building for 2 crores. After a year, they sold it for 3 crores and shared the profits equally. Are they doing the business in partnership ? Give reason in support of your answer. 

Question. Give the average period in months for charging interest on drawings for the same amount withdrawn in the beginning of each quarter.

Question. Durga and Naresh were partners in a firm. They wanted to admit five more members in the firm. State any one category of individuals other than minors who cannot be admitted by them.

Question. Super Profit = _ 

Question. A group of 40 people want to form a partnership firm. They want your advice regarding the maximum number of persons that can be there in a partnership firm and the name of the act in which these provisions are given. 

Question. The method of valuation of goodwill in which super profit is capitalized at the normal rate of return __ 

Question. A partnership firm has 50 members. All the partners have agreed to admit Ram and Mohan as new partners. Can Ram and Mohan be admitted ? 

Question. The method of maintaining Capital Accounts of partner, in which only Partners’ Capital Account is Prepared :

Question. Would a ‘charitable dispensary’ run by 8 members be deemed as partnership firm ? Give reason in support of your answer. 

Question. In the absence of Partnership Deed, interest on Partner’s loan is provided
(a) 6% p.a.
(b) 7% p.a.
(c) 4% p.a.
(d) 10% p.a. R

Question. Explain any four factors affecting Goodwill of firm. 

Question. The partner who provides capital and shares profit and loss in partnership business but does not take active part in the management is known as :
(a) Active Partner
(b) Sleeping Partner
(c) Secret Partner
(d) Limited Partner

Question. Suraj and Dilip are partners in a firm dealing in stationery items. The firm is well managed and enjoys the advantage of being cost effective. It buys stationery items at reasonable cost from Dilip’s relative who is a manufacturer of stationery items. The Firm’s sales outlet is situated near a school. As a result, the firm has a steady demand of stationery items and is earning good profits. The firm is donating 10% of its profits to the nearby school for the education of the students of below poverty line. State any two factors affecting the value of goodwill of the firm. 

Question. In the absence of Partnership Deed, the profits of a firm are divided among the partners :
(a) In the ratio of Capital
(b) Equally
(c) In the ratio of time devoted for the firm’s business.
(d) According to the managerial abilities of the partners. 

Question. Mr. Ram and Sons maintains the Capital Accounts under which it prepares Partners’ Capital Account as well as Partners’ Current Account. Which method, the firm using of maintaining Capital Accounts. 

Question. In the absence of Partnership Deed, interest on loan of a partner is allowed :
(a) at 8% per annum
(b) at 6% per annum
(c) no interest is allowed
(d) at 12% per annum

One Word / Sentence line Answers :

Question. In the absence of Partnership deed, profit and loss among partners will be shared. 

Question. The goodwill which is not purchased while earned by the efforts of management

Question.. In the absence of Partnership deed, interest on capitals of the partners is allowed 

Question. Alka, Barkha and Charu are partners in a firm having no partnership agreement. Alka, Barkha and Charu contributed ₹2,00,000, ₹ 3,00,000 and `₹1,00,000 respectively. Alka and Barkha desire that the profits should be divided in the ratio of capital contribution. Charu does not agree to this. Is Charu correct ? Give reason. 

Question. Interest on Partner’s Capital is adjusted by transferring it to _ side of P & L Appropriation Account. 

Question. The partnership deed is silent on payment of salary to partners. Amita, a partner, claimed that since she managed the business, she should get a monthly salary of ₹₹10,000. Is she entitled for the salary ? Give reasons. 

Question. A Partnership deed provides for the payment of Interest on Capital but there was a loss instead of profits during the year 2010-2011. At what rate will the interest on capital be allowed ?

Question. Kajal, Neerav and Alisha are partners in a firm sharing profit in the ratio of 3:2:1. They decided to admit Rajan, their landlord as a partner in the firm. Rajan brought sufficient amount of capital and his share of goodwill premium. The accountant of the firm passed the entry of rent paid for the building to Rajan in ‘Profit and Loss Appropriation Account’. Is he correct in doing so ? Give reason in support of your answer.

Question. Kishan, Neelam and Ashima are partners in a firm. They admitted Rehman their landlord as a partner in the firm. Rehman brought sufficient amount of capital and premium for Goodwill for his share in the profits. Rehman had given a loan of ₹ 3,00,000 @ 4% p.a. interest to the firm before he became the partner. Now the accountant of the firm is emphasising that the interest on loan should be paid @ 6% p.a. Is he right in doing so ? Give reason in support of your answer.

Question. The balance of Profit and Loss Appropriation Account is transferred to _ 

Question. What share of profit would a ‘Sleeping partner’,who has contributed 75% of the total capital, get in the absence of the deed ?

Question. Is a sleeping partner liable for the acts of other partners ?

Question. Interest on drawings of partners is adjusted by transferring it to _ side of P & L Appropriation Account. 

Match The Following

1) Product method

a) amount of drawing is uniform b) amount of drawing is irregular c) time intervals between the two drawings is also uniform

1) when partnership deed does not provide interest on capital	a) interest on capital is not allowed
2) when partnership deed provides for interest on capital but is silent on whether it is charge or appropriation	b) interest on capital is allowed in all circumstances
	c) interest on capital is allowed if only profit is their

1. According to companies act 2013 maximum numbers of partners in a firm can be	a)50
	b)100

1. Item which may be debited to partners capital account	a) Interest on Capital
2. Item which may be credited to partners capital account	b) Interest on Drawings

1. Rent paid to a partner	a) Charge against profit
2. Salary paid to partner	b) Appropriation of profit
	c) Both

We hope the above multiple choice questions for Class 12 Accountancy for Chapter 2 Accounting for Partnership Basic Concepts provided above with answers based on the latest syllabus and examination guidelines issued by CBSE, NCERT and KVS are really useful for you. Accounting for Partnership Basic Concepts is an important chapter in Class 12 as it provides very strong understanding about this topic. Students should go through the answers provided for the MCQs after they have themselves solved the questions. All MCQs have been provided with four options for the students to solve. These questions are really useful for benefit of class 12 commerce students. Please go though these and let us know if you have any feedback in the comments section.