Partnership

Accounting

Medium

common

In the Proforma of Partner's Capital Account under the Fluctuating capital Method, the Credit side includes the following items:

(A) Balance b/d (in case of credit opening balance)

(B) Salaries

(C) Interest on drawings

(D) Profit and Loss Appropriation (for share of profit)

Choose the correct answer from the options given below:

(A), (B) and (C) only

(A), (B), (C) and (D)

(A), (B) and (D) only

(B), (C) and (D) only

✅ Correct Option: 3

Under the Fluctuating Capital Method, all transactions affecting a partner's capital are directly recorded in the Capital Account itself.

Let me examine each item:

(A) Balance b/d (credit opening balance) - When there is a credit opening balance, it appears on the credit side of the Capital Account. ✓

(B) Salaries - Partner's salary is an appropriation that increases the partner's capital. It is credited to the Capital Account. ✓

(C) Interest on drawings - This is a charge against the partner for withdrawing money during the year. Since it reduces the partner's entitlement, it appears on the Debit side, not the Credit side. ✗

(D) Profit and Loss Appropriation (share of profit) - Partner's share of profit increases their capital and is credited to the Capital Account. ✓

The format of Partner's Capital Account (Fluctuating Method):

Debit Side: Drawings, Interest on Drawings, Share of Loss, Balance c/d

Credit Side: Balance b/d, Interest on Capital, Salary, Commission, Share of Profit, Balance c/d (if debit balance)

Items appearing on the Credit side are: (A), (B) and (D) only

Correct Answer: Option 3

2022: 23 Aug Shift 2

Gitansh withdrew Rs. 5000 pm at the end of every month for ten months. Interest on drawing is charged @ 10% p.a. Gitansh's interest on drawings is :

2022: 20 July Shift 1

If average capital employed in a firm is Rs. 15,00,000 and fair rate of return in the same industry was 8%. Goodwill was valued at Rs. 90,000 on the basis of three times of super profit. The Average Profit of the firm is ?

2025: 4 June Shift 2

Match List-I with List-II

List-I	List-II
Interest on Drawings	Time (Month)
(A). When the amount is withdrawn at the beginning of each month.	(I). 6 months
(B). When the amount is withdrawn at the end of each month.	(II). 6.5 months.
(C). When the amount is withdrawn at the middle of each month.	(III). 5.5 months.
(D). When the amount is withdrawn at the end of each quarter.	(IV). 4.5 months.

Choose the correct answer from the options given below:

2025: 27 May Shift 1

Which combination of statements are false about partnership-

(A) Interest on partner's loan is to be given @ 12% p.a. If the deed is silent about the rate.

(B) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner.

(D) Each partner carrying on the business is the principal as well as the agent for all the other partners

Choose the correct answer from the options given below:

(A), (B) and (D) only
(A), (B) and (C) only
(A), (B), (C) and (D)
(B), (C) and (D) only

2022: 16 July Shift 2

Vivek, Virat and Vineet were partners in a firm. Their capital accounts as on April 1, 2019 showed a balance of Rs.4,00,000, Rs.6,00,000 and Rs.8,00,000 respectively. On 1st July 2019 Virat introduced additional capital of Rs.1,00,000 while Vineet withdraw 50,000 on 31 Oct 2019 from their capitals. Interest on capital is allowed @8%. Calculate Interest on capital to be given to each partner.

2026: 13 May Shift 2

As per _____________. Purchased goodwill may be accounted for in the books and shown as an asset but self-generated goodwill is not accounted for in the books.

Solution

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