Partnership

Accounting

Easy

common

Which of the following statement is not true in case of fluctuating capital method under accounting for partnership?

Each partner has one account i.e. capital account.

All adjustments for drawings, salary, interest on capital etc., are posted (transferred) to the capital accounts.

The capital account balance remains unchanged unless there is an addition to or withdrawal of capital.

The capital account may sometimes show a debit balance.

✅ Correct Option: 3

A capital balance that stays unchanged except for fresh capital or withdrawal of capital is the defining feature of the fixed capital method, where all other adjustments go to a separate current account. Under the fluctuating method there is a single capital account that absorbs drawings, salary, interest and profits, so it changes every year and can even show a debit balance.

2026: 20 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Gaining Ratio	(I) Average Profit X 100/Normal rate of return
(B) Value of Goodwill	(II) Old Ratio - New Ratio
(C) Sacrificing Ratio	(III) Super Profit X 100/Normal rate of return
(D) Capitalised Value of average profit	(IV) New Ratio - Old Ratio

Choose the correct answer from the options given below:

2026: 6 June Shift 1

Select the appropriate ratio for the following events. Match List-I with List-II

List-I (Events)	List-II (Ratio)
(A) General Reserve	(I) Gaining Ratio
(B) Retirement of a partner	(II) Old Profit Sharing Ratio
(C) Admission of a partner	(III) New Profit Sharing Ratio
(D) Adjustment of Capitals at the time of Admission	(IV) Sacrificing Ratio

Choose the correct answer from the options given below:

2024

The adjustment required for overvaluation of closing stock, while calculating adjusted profit for calculating goodwill is

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?

2022: 8 Aug Shift 2

Which from the following is not a feature of a partnership firm?

2026: 13 May Shift 2

Nimrat, Simrat and Harjeet are partners sharing profits and losses in the ratio of 5 : 3 : 2. The partnership deed provides for charging interest on drawings @ 10% p.a. The drawings of Nimrat, Simrat and Harjeet during the year ending March 31, 2025 amounted to Rs. 60,000, Rs. 45,000 and Rs. 30,000 respectively, which were made on 1st April, 2024. After the final accounts have been prepared, it was discovered that interest on drawings has not been taken into consideration. If the necessary adjustment is made for rectification of this error, then:

Which of the following statement is not true in case of fluctuating capital method under accounting for partnership?

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