21 Questions
What is the essential feature of a partnership?
Shared profits
How is profit or loss distributed among the partners in a partnership?
Proportionately to the capital invested by each partner
What adjustments are made to rectify past errors in partners' capital accounts?
Necessary adjustments in partners' drawings accounts
What is the minimum number of persons required to form a partnership according to the Indian Partnership Act 1932?
Two persons
In which form of organisation do people usually adopt when the business expands?
Partnership
According to the Indian Partnership Act 1932, what becomes the basis of the relationship between partners?
Written agreement
What is the essential feature of partnership with regards to the business according to the Indian Partnership Act 1932?
Agreement to carry on some business
What is the maximum number of partners prescribed by the Central Government in a firm according to the Companies Act 2013?
50
What does a partnership firm have apart from the partners constituting it?
'Separate legal entity'
How does the Indian Partnership Act 1932 define partnership?
'Relation between persons who have agreed to share the profits of a business'
What is the name under which the business is carried called according to the Indian Partnership Act 1932?
'Firm's name'
In what form should an agreement between partners be according to the Indian Partnership Act 1932?
'Written agreement only'
What is the main reason for adopting the partnership form of organisation?
To have more capital and larger number of people to manage the business and share its risks
What is a key peculiarity of accounting for partnership firms?
Partnership firms come into existence when two or more persons establish a business and share its profits
According to the Indian Partnership Act 1932, what is the minimum number of persons required to form a partnership?
Two persons
What accounts are prepared under both fixed and fluctuating capital methods in a partnership?
Partners' Capital and Current accounts
What is the effect of a guarantee for a minimum amount of profit on the distribution of profits among the partners?
It affects the distribution of profits among the partners
According to the Indian Partnership Act 1932, what becomes the basis of the relationship between partners?
Written agreement
What accounts are prepared under both fixed and fluctuating capital methods in a partnership?
Both partners’ capital accounts and Profit and Loss Appropriation Account
What is the basis of the relationship between partners according to the Indian Partnership Act 1932?
The partnership deed
What is the name under which the business is carried called according to the Indian Partnership Act 1932?
Firm's name
Test your understanding of partnership accounting with this quiz covering essential features of partnerships, the Indian Partnership Act 1932, preparation of partners’ capital accounts, distribution of profits or losses among partners, and calculation of interest on capital and drawings.
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