Partnership Accounts

The minimum number of persons in a partnership is ___

• 2

• 4

• 10

• 20

What is the minimum and maximum number of partners required

to form a partnership business?

• 2 and 4

• 2 and 50

• 2 and 20

• 2 and 10

In a partnership business, agreement is

• compulsory

• optional

• not necessary

The Written agreement of partnership is called ___

• Partnership Contract

• Partnership Act

• Agreement

• Partnership Deed

In absence of a Partnership deed, partners are entitled to

interest on capital at the rate of ___

• 6%

• 9%

• 12%

• nil

In absence of Partnership deed, partners will share the profits and losses in the equal ratio

• True

• False

In absence of Partnership Deed, partners will get salary, commission etc.

• Yes

• No

Which of the following is an disadvantage of partnership accounts as compared to a sole trader?

• Business debts will be shared

• Responsibility for managing the business will be shared

• Profits will be shared

• Can discuss and share decision-making

Answer explanation

Only profits shared is a disadvantage.

All other options are advantages.

In partnership, partners liabilities are ___

• Limited

• Unlimited

• Limited to the capital invested

• Limited to the amount mentioned

Answer explanation

Unlimited liability is a disadvantage.

What is the correct double entry for partners introduce capital?

• DR Assets CR Partners Capital

• DR Assets CR Partners Current

• DR Assets CR Appropriation

• DR Capital CR Assets

Answer explanation

Cr Capital as it increases the capital.

Dr Asset as it represents cash/bank bring in as capital. Cash/Bank is an asset.