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CUET Accountancy 2025 PYQs16 May Shift 1. Free, no login required.

Partnership

past year questions, CUET Accountancy 2025 16 May Shift 1

Accounting

past year questions, Partnership, CUET Accountancy 2025 16 May Shift 1

Medium

Following are considered as appropriations out of profits

(A) Rent paid to partners

(B) Interest on capital

(C) Salary paid to partners

(D) Commission allowed to partners

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 1

Appropriations out of profits are distributions of profit among partners, shown in the Profit & Loss Appropriation Account. These are not expenses but ways of dividing the available profit.

Let's analyze each item:

(A) Rent paid to partners - This is not an appropriation. When a partner allows the firm to use their property, rent paid is treated as a business expense (charge against profits). It is debited to the Profit & Loss Account, similar to rent paid to any third party.

(B) Interest on capital - This is an appropriation. Interest on capital is a distribution of profits to partners based on their capital contribution. It appears in the Profit & Loss Appropriation Account.

(C) Salary paid to partners - This is an appropriation. Partner's salary represents their share of profits for active participation in the business. It is not treated as a business expense but shown in the Profit & Loss Appropriation Account.

(D) Commission allowed to partners - This is an appropriation. Commission to partners is also a method of profit distribution and appears in the Profit & Loss Appropriation Account.

The fundamental difference is that rent to partners is a charge against profits (expense), while interest on capital, salary, and commission are appropriations of profits (distribution).

Correct Answer: Option 1: (B), (C) and (D) only

Related questions:

2025: 13 May Shift 1

Match List-I with List-II

List-IList-II
(A) Admission of a partner(I) Executor Accounts
(B) Retirement of a partner(II) Sacrificing Ratio
(C) Death of a partner(III) Realisation Account
(D) Dissolution of a partnership(IV) Gaining Ratio

Choose the correct answer from the options given below:

2025: 22 May Shift 1

Yadu, Madhu and Vidu are partners, sharing profit and losses in the ratio of 2:2:1. Their fixed capitals on April 01, 2018 were:

Yadu Rs. 5,00,000, Madhu Rs. 4,00,000 and Vidu is 3,50,000.

As per the partnership deed, partners are entitled to interest on capital @5% p.a. and Yadu has to be paid a salary of Rs. 2000 per month. The net loss of the firm as per profit and loss account for the year ending March 31, 2019, amounted to Rs. 75,000. On the basis of the profit and loss appropriation account, Partners' distribution of loss would be:

2025: 22 May Shift 1

All adjustments in respect of partner's salary, partner's commission, interest on capital, interest on drawings, etc. are made through:

2025: 2 June Shift 2

In the absence of partnership deed, interest on drawings is charged at.

2026: 23 May Shift 2

Choose the correct option for transferring partner's salary to Profit and Loss Appropriation A/c

2026: 19 May Shift 1

Which of the following statements are true ?

(A) Under fixed capital method, capital and current accounts are prepared.

(B) If a partner withdrew in the beginning of each month, average period is 6.5 months taken for interest calculation.

(C) No interest on capital is provided in the absence of partnership deed.

(D) In the absence of partnership deed, profits are distributed in the capital ratio.

Choose the correct answer from the options given below:

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