Commerce MCQs
Topic Notes: Commerce
MCQs and preparation resources for competitive exams, covering important concepts, past papers, and detailed explanations.
Plato
- Biography: Ancient Greek philosopher (427–347 BCE), student of Socrates and teacher of Aristotle, founder of the Academy in Athens.
- Important Ideas:
- Theory of Forms
- Philosopher-King
- Ideal State
31
Which form of business organization restricts partnership eligibility exclusively to male members?
Answer:
Joint Hindu family business
The Joint Hindu Family business is governed by Hindu Law. Traditionally, only male members (coparceners) of the family were entitled to be partners in the business. Although legal reforms have evolved, this specific business structure is historically defined by its unique membership criteria based on family lineage and gender.
32
Can a partner transfer their interest in the firm to an external party?
Answer:
cannot transfer his share to an outsider
According to the principle of delectus personae, a partner cannot unilaterally transfer their share to an outsider to make them a partner without the unanimous consent of all existing partners. While a partner may assign their interest to receive profits, the assignee does not automatically acquire the rights of a partner, such as the right to participate in management or inspect books.
33
Under the fixed capital account method in a partnership, which accounts are maintained for the partners?
Answer:
Both A and B
In the fixed capital method, the capital account remains unchanged unless additional capital is introduced or withdrawn permanently. All other transactions, such as interest on capital, salary, commission, and share of profit or loss, are recorded in a separate Partner's Current Account to keep the capital balance stable.
34
Partners A, B, and C contribute capital of Rs. 7,50,000, Rs. 7,30,000, and Rs. 7,20,000 respectively without a formal partnership agreement. If the firm earns a profit of Rs. 7,15,000, what is A's share of the profit?
Answer:
Rs. 75,000
According to the Partnership Act 1932, in the absence of a partnership agreement, profits must be shared equally among all partners, regardless of their capital contributions or the amount of time worked. Since there are three partners, A's share is 7,15,000 / 3 = 2,38,333. The provided answer choice C appears to be based on a different assumption or error.
35
Partners A and B share profits in a 2:3 ratio. If they admit partner C for a 1/4th share in the business, what is the sacrificing ratio of A and B?
Answer:
2 : 3
When a new partner is admitted and no specific information is provided regarding how the new partner acquires their share from existing partners, it is assumed that the existing partners continue to share profits in their original profit-sharing ratio. Therefore, the sacrificing ratio remains identical to their old profit-sharing ratio, which is 2:3 in this case.
36
A is regularly drawing Rs. 500 on 16thof every month. if he is to pay interest on Rs. 6000 at a given rate, then the interest for the total period will be
Answer:
6 months
Source answer preserved: option B (6 months). AI attempted to change protected answer data (option_d), so this item is flagged for manual review before study use.
37
How is interest charged on partner drawings treated from the perspective of the business entity?
Answer:
Gain
Interest on drawings is considered an income or gain for the business entity because it represents a charge levied on the partners for using firm funds for personal purposes. In the books of the partnership, this interest is credited to the Profit and Loss Appropriation Account, effectively increasing the distributable profit available to the partners.
38
Partners X and Y form a partnership. X contributes Rs. 5,000 and works half-time, while Y contributes Rs. 20,000 and works full-time. How should they share the profits?
Answer:
1 : 1
In the absence of a formal partnership deed specifying a profit-sharing ratio, the Partnership Act 1932 mandates that profits and losses must be shared equally among partners, regardless of their capital contributions or the time they devote to the business. Therefore, despite the differences in investment and labor, the default legal position is an equal distribution.
39
In which account are entries recorded based on the book value of assets and liabilities?
Answer:
Capital
The Capital account tracks the owner's equity, which is derived from the book values of assets and liabilities. While Revaluation and Realisation accounts adjust assets to market or settlement values, the Capital account maintains the historical book value basis for the owner's investment, reflecting the net worth of the business entity over time.
40
Asha and Vipasha, equal partners, incorrectly calculated interest on capital at 6% instead of 5%. How should the adjustment be recorded?
Answer:
Asha will be debited with Rs. 1,500 and Vipasha will be credited with Rs. 1,500
Asha's excess interest is 500,000 * 1% = 5,000. Vipasha's excess is 200,000 * 1% = 2,000. Total excess is 7,000. Distributed equally, each should bear 3,500. Asha was credited 5,000 (should be 3,500), so debit 1,500. Vipasha was credited 2,000 (should be 3,500), so credit 1,500.