Account class 12 Accounting for partnership Firms Fundam

1. Partner’s current account are opened when their capital account are ;

Fixed

Fixed and fluctuating both

Fluctuating

None of these

2. The interest on capital accounts of partner under the fluctuating capital account method is credit to

Interest account

Profit and losses account

Partners capital accounts

None of these

3. In the absence of an arrangement to the contrary, partners share profit and loses in the

Ratio of their capitals in the end of the year.

Ratio of their capitals at the end of the year.

Ratio of average capital.

Equal ratio.

4. In the absence of the agreement to the contrary, the partners are ;

Entitled for 6% interest on their capitals, only when there are profits.

Entitled for 9% interest on their capitals, only when there are profits.

Entitled for interest on capital at the bank rate, only when their are profits.

Not entitled for any interest on their capital.

5. Current account of the partner ;

Will always have a credit balance.

Will always have a debit balance.

May have a debit balance or a credit balance.

Can never have a debit balance.

6. Interest payable on the capitals of the partner is charged to ;

Profit and loss account.

Profit and lost adjustment account.

Realization account.

Profit and loss appropriation account.

7. Interest on partners drawing under fluctuating capital accounts its debited to ;

Partners capital account.

Profit and loss account.

Drawing account.

None of these.