Partnership

Accounting

Easy

Which of the following is not a general feature of partnership-

In order to form partnership, there should be at least two persons coming together for a common goal.

Partnership is the result of an agreement between two or more persons to do business and share its profits and losses.

The agreement should be to carry on some business.

Liability of Partners are limited to the extent of capital contribution.

✅ Correct Option: 4

According to the Indian Partnership Act, 1932, a partnership firm has the following essential features:

Analyzing each option:

Option 1 is a general feature - Partnership requires a minimum of two persons coming together with mutual consent to carry on business and share profits.

Option 2 is a general feature - Partnership is essentially a contractual relationship arising from an agreement between parties to share profits and losses of a business.

Option 3 is a general feature - The agreement must be to carry on a lawful business. The business objective is mandatory for partnership to exist.

Option 4 is NOT a general feature - In a general partnership, partners have unlimited liability. This means partners are personally liable for all debts and obligations of the firm. If the firm's assets are insufficient to pay creditors, partners' personal assets can be attached to settle the debts. Their liability extends beyond their capital contribution.

Limited liability exists only in the case of Limited Liability Partnership (LLP), which is a different form of business organization governed by the LLP Act, 2008, not under the general partnership structure.

Therefore, Option 4 is the correct answer as it incorrectly states a feature of partnership.

2025: 27 May Shift 2

The Profit and Loss Appropriation Account is merely an extension of the Profit and Loss Account of the firm,

Which, among the following, is not shown in the Profit and Loss Appropriation Account?

2025: 4 June Shift 2

Which combination of statements is true about the fixed and fluctuating capital:

(A). Under the Fixed capital method, two separate accounts are maintained for each partner, viz., 'capital account' and 'current account'.

(B). Under the Fluctuating capital method, the balance of the capital account fluctuates from year to year.

(C). Under the Fixed capital method, drawings, salary, interest on capital etc. are posted (transferred) in the current accounts and not in the capital accounts.

(D). Under the Fixed capital method, the capital accounts always show a debit balance.

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

2025: 24 May Shift 1

Which of the following characteristics is highlighted in the statement: "He can bind other partners by his acts and also is bound by the acts of other partners with regard to the business of the firm."

2022: 23 Aug Shift 2

Calculate net profit as per P & L A/c for the year ending 31 March, 2022 from the following information :

share of profit transferred to Capital A/c's of partners :

Ram Rs. 7,000

Shyam Rs. 3,500

Interest on capital :

Ram Rs. 1,500

Shyam Rs. 500

Interest on Drawings :

Ram Rs. 300

Shyam Rs. 200

Ram's salary Rs. 1,000

2026: 11 May Shift 2

Which of the following item will not be shown on the credit of partner's current A/c?

Which of the following is not a general feature of partnership-

Solution

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