UNIT 1 - ACCOUNTANCY CATEGORISED

📚

UNIT 1 - ACCOUNTANCY CATEGORISED - PYQ (1)

Accountancy

⏱️ 30 Minutes

❓ 26 Questions

📅 2022, 2023, 2024 & 2025

✍️ Long Answers

📌 Answers are locked once submitted — results and explanations appear at the end.

UNIT 1 - ACCOUNTANCY CATEGORISED - PYQ (1)

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QUESTION 1 OF 26

Match List I with List II in context of not having partnership deed: (PYQ 2022)

LIST I	LIST II
A. Interest on loan	I. Equal
B. Interest on drawings	II. Will not be charged
C. Salary	III. @6% p.a.
D. Profit sharing ratio	IV. Will not be allowed provided

Answer Review

1 Match List I with List II in context of not having partnership deed: (PYQ 2022)

LIST I	LIST II
A. Interest on loan	I. Equal
B. Interest on drawings	II. Will not be charged
C. Salary	III. @6% p.a.
D. Profit sharing ratio	IV. Will not be allowed provided

A A-IV, B-I, C-III, D-II

B A-III, B-IV, C-II, D-I

C A-IV, B-III, C-II, D-I

D A-III, B-II, C-IV, D-I

💡 Short Explanation

In the absence of a deed, the Indian Partnership Act, 1932 applies. Interest on partner's loan is fixed at 6% p.a. No salary or interest on drawings is allowed/charged. Profits and losses must be shared equally.

✅ Correct Answer Explanation

(Detailed) When there is no written partnership deed, specific rules of the Indian Partnership Act, 1932 take effect: A-III: Partners are entitled to interest on loans/advances made to the firm at a statutory rate of 6% per annum. B-II: No interest is to be charged on the drawings made by the partners. C-IV: No partner is entitled to any salary or remuneration for taking part in the conduct of the business. D-I: Profits and losses of the firm are to be shared equally among all partners, regardless of their capital contribution.

❓ Why Other Options Are Incorrect

A) A-IV, B-I, C-III, D-II
Incorrectly suggests interest on loan is not allowed and profit sharing is @6%.
B) A-III, B-IV, C-II, D-I
Incorrectly matches Interest on drawings with "not allowed" (it's "not charged").
C) A-IV, B-III, C-II, D-I
Incorrectly suggests interest on loan is not allowed.

🎯 Strategy

Used

Option Grouping

Option A → A-IV is wrong (Loan interest is a right).
Option B → B-IV is technically imprecise (Drawings are "charged", not "allowed").
Option D → Perfectly aligns with the legal provisions.

Final Answer → D

🧠 Memory Trick

6-E-N-N: 6% Loan, Equal Profit, No Salary, No Interest on Capital/Drawings.

📚 Class XII, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts, Section: Provisions relevant to partnership accounts.

2 The capital accounts of partners will always show a ________ balance under fixed capital account method (PYQ 2022)

A Debit

B Credit

C Zero

D Negative

💡 Short Explanation

Under the Fixed Capital method, two accounts are maintained: Capital and Current. The Capital Account only records the initial investment and permanent additions/withdrawals. Since a partner cannot withdraw more than their permanent capital, it remains positive.

✅ Correct Answer Explanation

(Detailed) In the Fixed Capital Account method, the Partner's Capital Account is intended to remain "fixed" or unchanged unless additional capital is introduced or a part of the capital is permanently withdrawn as per the agreement. All day-to-day adjustments like interest, salary, and drawings against profits are recorded in a separate "Current Account." Therefore, the Capital Account itself will always show a Credit balance, representing the amount owed by the firm to the partners.

❓ Why Other Options Are Incorrect

A) Debit
A debit balance in a capital account means the partner owes money to the firm, which is impossible in the "Fixed" account as drawings against profit are handled in the Current Account.
C) Zero
While theoretically possible if a partner withdraws everything and leaves, in a functional firm, there is always an investment balance.
D) Negative
A negative balance is a debit balance; under the fixed method, the capital account cannot go below zero.

🎯 Strategy

Used

Option Grouping

Option A → Associated with losses/excess drawings (Fluctuating method).
Option B → Matches the definition of a "Fixed" investment.
Option C → Only occurs at the time of closing the firm.

Final Answer → B

🧠 Memory Trick

F-C-C: Fixed Capital is always Credit.

📚 Class XII, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts, Section: Maintenance of Capital Accounts of Partners.

3 When the total amount withdrawn is given but the date of withdrawal is not given then interest on drawings is charged for a period of: (PYQ 2022)

A 3 months

B 6 months

C 9 months

D 12 months

💡 Short Explanation

If the specific timing of drawings is unknown, we assume they happened evenly. Mathematically, the average period for a full year is 6 months.

✅ Correct Answer Explanation

(Detailed) According to the rules of Partnership Accounting, if a partner has withdrawn a total sum of money during the year but the specific dates of those drawings are not mentioned, it is assumed that the drawings were made evenly throughout the year. Therefore, interest on the total amount is calculated for an average period of six months at the given rate per annum.

❓ Why Other Options Are Incorrect

A) 3 months
This would only apply if drawings were made in a specific quarterly pattern.
C) 9 months
There is no standard accounting assumption that defaults to 9 months.
D) 12 months
This would incorrectly assume all money was withdrawn on the first day of the year.

🎯 Strategy

Used

Substitution
Rule → No date = Average.
Average of the year = 6 months.
Final Answer → B

🧠 Memory Trick

Half-way Rule: If you don't know the date, go half-way through the year (6 months).

📚 Class XII, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts, Section: Interest on Drawings.

4 In the absence of partnership agreement, mutual relations of partners are governed by the_______ (PYQ 2023)

A Provisions of Indian partnership Act 1942

B Provisions of Indian partnership Act 1956

C Provisions of Indian partnership Act 1936

D Provisions of Indian partnership Act 1932

💡 Short Explanation

Partnership is based on an agreement. If no agreement exists, statutory rules apply. The governing law is the Indian Partnership Act, 1932.

✅ Correct Answer Explanation

(Detailed) The Indian Partnership Act, 1932 provides the legal framework governing partnership firms in India. Whenever the Partnership Deed is absent or silent on any matter, the provisions of the Act automatically apply. These provisions regulate the mutual rights and duties of partners, profit sharing, interest on capital, and other partnership matters.

❓ Why Other Options Are Incorrect

A) Indian Partnership Act 1942
No such legislation exists.
B) Indian Partnership Act 1956
1956 relates to the old Companies Act.
C) Indian Partnership Act 1936
No partnership legislation was enacted in this year.

🎯 Strategy

Used

Contextual/Tonal Matching
Partnership → Partnership Act.
Correct statutory year → 1932.

🧠 Memory Trick

Partner = '32

📚 Class 12, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts.

5 Arrange the following in the context of Accounting for partnership. (PYQ 2023)
A. Preparation for Trading and Profit and Loss Account.
B. Calculation of divisible profit or Loss.
C. Preparation of profit and loss Appropriation Account.
D. Preparation of Balance Sheet.
E. Preparation of partners' capital Account.
Choose the correct answer from the given below:

A A, C, B, E, D

B A, C, E, B, D

C B, C, D, E, A

D C, D, E, A, B

💡 Short Explanation

Profit is calculated first. Profit is appropriated next. Capital accounts are updated before preparing the Balance Sheet.

✅ Correct Answer Explanation

(Detailed) The sequence is: Trading and Profit & Loss Account. Profit & Loss Appropriation Account. Calculation of Divisible Profit. Partners' Capital Account. Balance Sheet. Therefore: A → C → B → E → D.

❓ Why Other Options Are Incorrect

B)
Capital account cannot be prepared before calculating divisible profit.
C)
Begins with divisible profit before determining profit.
D)
Places Balance Sheet before profit determination.

🎯 Strategy

Used

Logical Sequencing
Profit → Distribution → Capital → Balance Sheet

🧠 Memory Trick

Trading → P&L Appropriation → Capital → Balance Sheet

📚 Class 12, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts.

6 Which of the following is not a charge against profit? (PYQ 2023)

A Manager's Commission

B Rent to partner

C Interest on Loan

D Interest on Partner's Capital

💡 Short Explanation

Charges are business expenses. Appropriations are distributions of profit. Interest on Capital is an appropriation.

✅ Correct Answer Explanation

(Detailed) Interest on Partner's Capital is paid to partners as owners of the business. It is an appropriation of profit and is shown in the Profit & Loss Appropriation Account. It is payable only when profits are available, unlike charges that are business expenses.

❓ Why Other Options Are Incorrect

A) Manager's Commission
Business expense.
B) Rent to Partner
Charge against profit.
C) Interest on Loan
Charge against profit.

🎯 Strategy

Used

Odd One Out
Three are charges; one is appropriation.

🧠 Memory Trick

IOC = Owner's Share, not Expense

📚 Class 12, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts.

7 Salary of a partner is shown in: (PYQ 2023)

A Profit and Loss A/c

B Profit and Loss Appropriation A/c

C Trading A/c

D Manufacturing A/c

💡 Short Explanation

Partner's salary is an appropriation of profit. It is not a business expense. Therefore it appears in Profit and Loss Appropriation Account.

✅ Correct Answer Explanation

(Detailed) Partner's salary is paid to a partner in their capacity as an owner of the business. It is not a charge against profit but an appropriation of profit and is therefore debited to the Profit and Loss Appropriation Account. The Profit and Loss Appropriation Account shows: Partner's Salary Interest on Capital Partner's Commission Distribution of profits Hence, the correct answer is: Profit and Loss Appropriation A/c.

❓ Why Other Options Are Incorrect

A) Profit and Loss A/c
Contains business expenses and incomes.
C) Trading A/c
Used for calculating Gross Profit.
D) Manufacturing A/c
Used for determining cost of production.

🎯 Strategy

Used

Option Grouping
Appropriation Items → Partner Salary, Interest on Capital, Commission.

🧠 Memory Trick

Partner = Owner → Appropriation

📚 Class XII, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts.

8 Select the conditions required for computing interest on drawings using average period method: (PYQ 2023)
A. Equal amount
B. Fixed interval
C. Varying amounts
D. Different interval
E. Rate of Interest

A A, D and E only

B A, C and B only

C A, C and D only

D A, B and E only

💡 Short Explanation

Average Period Method is a shortcut method. It requires equal drawings at regular intervals. Rate of interest must be known.

✅ Correct Answer Explanation

(Detailed) The Average Period Method can be used only when: Drawings are of Equal Amount (A). Drawings are made at Fixed Intervals (B). Rate of Interest (E) is known. If amounts vary or intervals differ, the Product Method must be used instead. Therefore, the correct combination is: A, B and E only.

❓ Why Other Options Are Incorrect

A) A, D and E only
Different intervals are not allowed.
B) A, C and B only
Varying amounts are not allowed.
C) A, C and D only
Contains both varying amounts and different intervals.

🎯 Strategy

Used

Extreme Word Filter
Average Method requires consistency, not variation.

🧠 Memory Trick

Same Amount + Same Time + Same Rate

📚 Class XII, Accountancy Part I, Chapter 2: Interest on Drawings.

9 The content of Partnership deed includes: (PYQ 2023)
A. Names/Addresses
B. Dispute settlement
C. Cannot be altered
D. Bank rules
E. Verbal is a deed

A B, D and E only

B A, C and E only

C A, B and C only

D A, B and D only

💡 Short Explanation

Partnership deed is a written agreement. It includes operational and administrative rules. It can be amended by mutual consent.

✅ Correct Answer Explanation

(Detailed) A Partnership Deed generally contains: Names and Addresses of Partners (A) Method of Settlement of Disputes (B) Rules regarding Banking Operations (D) Statements C and E are incorrect because: A deed can be altered by mutual agreement. A deed is a written document, not a verbal agreement. Therefore: A, B and D only.

❓ Why Other Options Are Incorrect

A) Includes E which is incorrect.
B) Includes C and E, both incorrect.
C) Includes C which is incorrect.

🎯 Strategy

Used

Substitution
Reject:
"Cannot be altered"
"Verbal is a deed"

🧠 Memory Trick

Deed = Written Document

📚 Class XII, Accountancy Part I, Chapter 2: Partnership Deed.

10 Match List I with List II (PYQ 2023)

List I	List II
A. Only Capital A/c exist	IV. Fluctuating Capital Account
B. Capital account balance remain unchanged	III. Fixed Capital Account
C. Fresh/additional capital brought in	I. Credited to partner's capital account
D. Permanent withdrawal	II. Debited to Partner's Capital Account

A A-I, B-II, C-III, D-IV

B A-II, B-III, C-IV, D-I

C A-IV, B-III, C-I, D-II

D A-III, B-IV, C-I, D-II

💡 Short Explanation

Fluctuating method uses only one capital account. Fixed method keeps capital balance unchanged. Additional capital is credited. Permanent withdrawal is debited.

✅ Correct Answer Explanation

(Detailed) Correct matching: A → IV : Only Capital A/c exists → Fluctuating Capital Method. B → III : Capital balance remains unchanged → Fixed Capital Method. C → I : Additional Capital Introduced → Credited to Capital Account. D → II : Permanent Withdrawal → Debited to Capital Account. Therefore: A-IV, B-III, C-I, D-II.

❓ Why Other Options Are Incorrect

A) Incorrectly links capital methods and entries.
B) Incorrect classification of capital methods.
D) Fixed Capital Method requires two accounts, not one.

🎯 Strategy

Used

Elimination
One Account = Fluctuating.
Fixed Balance = Fixed Method.

🧠 Memory Trick

Fixed = Two Accounts, Fluctuating = One Account

📚 Class XII, Accountancy Part I, Chapter 2: Maintenance of Capital Accounts of Partners.

11 Identify the way by which the clauses of partnership deed can be altered. (PYQ 2023)

A On the basis of majority partners' consent

B On the basis of registrar of companies consent

C On the basis of all the partners' consent

D Clauses of partnership deed cannot be altered

💡 Short Explanation

�� Partnership is based on mutual agreement. �� Changes require consent of all parties. �� Majority cannot alter fundamental contractual rights.

✅ Correct Answer Explanation

(Detailed) The Partnership Deed is a contractual agreement among partners. Since it is based on mutual consent, any amendment, addition or deletion in its clauses requires unanimous approval of all partners.

❓ Why Other Options Are Incorrect

A) Majority approval is insufficient for deed alteration.
B) ROC approval is not applicable.
D) Partnership deeds can be amended with unanimous consent.

🎯 Strategy

Used

Contextual/Tonal Matching
�� Partnership is based on mutual trust and agreement.
�� Therefore, all partners must agree.

🧠 Memory Trick

"All for one and one for all."

📚 Class XII Accountancy Part I – Chapter 2: Accounting for Partnership – Basic Concepts.

📄 Passage

Partnership: Amit, Babu and Charu set up a partnership firm on April 1, 2022. They contributed ₹50,000, ₹40,000 and ₹30,000, respectively as their capitals and agreed to share profits and losses in the ratio of 2:2:1. Amit is to be paid a salary of ₹1,000 per month and Babu, a commission of ₹5,000. It is also provided that interest to be allowed on capital at 6% p.a. The drawings for the year were Amit ₹6,000, Babu ₹4,000 and Charu ₹2,000. Interest on drawings of ₹300 was charged on Amit's drawings, ₹200 on Babu's drawings and ₹100, on Charu's drawings. The net profit as per Profit and Loss Account for the year ending March 31, 2023 was ₹55,000 before charging manager's commission. Manager was allowed commission @ 10% on net profit after charging such commission.

Question: Calculate the amount of Manager's Commission. (PYQ 2024)

A ₹5,500

B ₹5,000

C ₹5,050

D ₹2,640

💡 Short Explanation

Manager's commission is a charge against profit. Formula for commission after charging itself: Commission = Net Profit × Rate / (100 + Rate) ��55,000 × 10/110 = ₹5,000.

✅ Correct Answer Explanation

(Detailed) Since the manager is entitled to commission at 10% of net profit after charging such commission, the formula used is: Commission = Net Profit × Rate / (100 + Rate) = ₹55,000 × 10/110 = ₹5,000 Therefore, the Manager's Commission is ₹5,000.

❓ Why Other Options Are Incorrect

A) ₹5,500
This is 10% of ₹55,000 before charging commission.
C) ₹5,050
Incorrect mathematical calculation.
D) ₹2,640
Unrelated to the commission computation.

🎯 Strategy

Used

Substitution
Commission = ₹55,000 × 10/110 = ₹5,000

🧠 Memory Trick

"After Charging" ⇒ Add rate to denominator (100 + Rate).

📚 Class 12, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts, Section: Final Accounts.

📄 Passage

Question: Interest allowed on Charu's capital is: (PYQ 2024)

A ₹3,000

B ₹2,400

C ₹1,800

D No Interest will be allowed due to insufficient profits

💡 Short Explanation

Interest on Capital = Capital × Rate. Charu's Capital = ₹30,000. Rate = 6%.

✅ Correct Answer Explanation

(Detailed) Interest on Capital is allowed at 6% per annum. Charu's Interest: = ₹30,000 × 6% = ₹1,800 Since sufficient profit is available, the full interest is allowed.

❓ Why Other Options Are Incorrect

A) ₹3,000
This is Amit's interest.
B) ₹2,400
This is Babu's interest.
D) No Interest
Profit available is sufficient to allow interest.

🎯 Strategy

Used

Dimensional Analysis
��30,000 × 6% = ₹1,800

🧠 Memory Trick

IOC = Capital × Rate

📚 Class 12, Accountancy Part I, Chapter 2: Interest on Capital.

📄 Passage

Question: Net Profit transferred from Profit and Loss Account to Profit and Loss Appropriation A/c is: (PYQ 2024)

A ₹55,000

B ₹50,000

C ₹26,400

D ₹49,500

💡 Short Explanation

Manager's commission is a charge against profit. Profit before commission = ₹55,000. Less Commission = ₹5,000.

✅ Correct Answer Explanation

(Detailed) Net Profit as per Profit & Loss Account = ₹55,000 Less: Manager's Commission = ₹5,000 Profit transferred to P&L Appropriation A/c = ₹50,000 Therefore, the correct answer is ₹50,000.

❓ Why Other Options Are Incorrect

A) ₹55,000
Before deducting manager's commission.
C) ₹26,400
Divisible profit after appropriations.
D) ₹49,500
Based on incorrect commission calculation.

🎯 Strategy

Used

Elimination
Profit for Appropriation = Profit − Charges

🧠 Memory Trick

Managers are paid before Partners share profits.

📚 Class 12, Accountancy Part I, Chapter 2: Profit and Loss Appropriation Account.

📄 Passage

Question: Net divisible profit credited to Babu's Capital A/c is: (PYQ 2024)

A ₹10,560

B ₹5,280

C ₹5,060

D ₹10,120

💡 Short Explanation

Available Profit = ₹50,600. Total Appropriations = ₹24,200. Divisible Profit = ₹26,400. Babu's Share = 2/5 × ₹26,400 = ₹10,560.

✅ Correct Answer Explanation

(Detailed) Step 1: Total Available Profit Profit after Manager's Commission = ₹50,000 Add Interest on Drawings = ₹300 + ₹200 + ₹100 = ₹600 Total = ₹50,600 Step 2: Total Appropriations Amit's Salary = ₹12,000 Babu's Commission = ₹5,000 Interest on Capital = ₹3,000 + ₹2,400 + ₹1,800 = ₹7,200 Total Appropriations = ₹24,200 Step 3: Divisible Profit = ₹50,600 − ₹24,200 = ₹26,400 Step 4: Babu's Share = ₹26,400 × 2/5 = ₹10,560 Therefore, Babu's share is ₹10,560.

❓ Why Other Options Are Incorrect

B) ₹5,280
Charu's share (1/5).
C) ₹5,060
Incorrect computation.
D) ₹10,120
Arithmetic error.

🎯 Strategy

Used

Substitution/Calculation
Divisible Profit × Profit Sharing Ratio

🧠 Memory Trick

Divisible Profit = Credits − Appropriations

📚 Class 12, Accountancy Part I, Chapter 2: Distribution of Profit among Partners.

📄 Passage

Question: If the partnership deed is silent, the provisions of which of the following Act is followed? (PYQ 2024)

A Indian Partnership Act, 1932

B Indian Contract Act, 1872

C Companies Act, 2013

D Companies Act, 1956

💡 Short Explanation

Partnership firms are governed by the Indian Partnership Act, 1932. Default rules apply when the deed is silent.

✅ Correct Answer Explanation

(Detailed) A Partnership Deed may not contain provisions regarding every matter. Whenever the deed is silent, the provisions of the Indian Partnership Act, 1932 automatically apply. Examples: • Equal profit sharing. • No interest on capital unless agreed. • Rules relating to admission, retirement and dissolution. Therefore, the correct answer is Indian Partnership Act, 1932.

❓ Why Other Options Are Incorrect

B) Indian Contract Act, 1872
General contract law, not the specific governing law for partnerships.
C) Companies Act, 2013
Applies to companies, not partnership firms.
D) Companies Act, 1956
Old company law and unrelated to partnership firms.

🎯 Strategy

Used

Contextual/Tonal Matching
Partnership-related question → Partnership Act.

🧠 Memory Trick

Partnership Problem = Partnership Act

📚 Class 12, Accountancy Part I, Chapter 2: Accounting for Partnership: Basic Concepts, Section: Provisions of Partnership Act, 1932.

17 Identify the correct sequence to be followed while preparing final accounts of a partnership firm: (PYQ 2024)

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

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

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

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

💡 Short Explanation

�� Gross Profit is calculated first. �� Net Profit is calculated next. �� Profit is appropriated before preparing the Balance Sheet.

✅ Correct Answer Explanation

(Detailed) → Trading Account determines Gross Profit. → Profit and Loss Account determines Net Profit. → Profit and Loss Appropriation Account distributes profit. → Balance Sheet shows the final financial position.

❓ Why Other Options Are Incorrect

Option B: Appropriation cannot occur before profit determination.
Option C: Trading Account must be prepared first.
Option D: Balance Sheet is prepared after Appropriation Account.

🎯 Strategy

Used: Elimination

�� Trading Account must come first.
�� Balance Sheet must come last.
�� Only Option A satisfies both conditions.
�� Final Answer → A.

🧠 Memory Trick

📚 → Class 12, Accountancy Part-I, Chapter 2: Accounting for Partnership: Basic Concepts.

18 Match List-I with List-II. (PYQ 2024)

List-I	List-II
A. Salary to partner	I. Credit side of Partner's Capital Account
B. Interest on partner's loan	II. Debit side of Partner's Current Account
C. Interest on partner's drawings	III. Debit side of Profit and Loss Account
D. Additional capital introduced	IV. Credit side of Partner's Current Account

A (A)-(I), (B)-(II), (C)-(III), (D)-(IV)

B (A)-(I), (B)-(III), (C)-(II), (D)-(IV)

C (A)-(IV), (B)-(III), (C)-(II), (D)-(I)

D (A)-(III), (B)-(IV), (C)-(I), (D)-(II)

💡 Short Explanation

�� Partner's Salary is credited to Current Account. �� Interest on Loan is charged to Profit and Loss Account. �� Interest on Drawings is debited to Current Account. �� Additional Capital is credited to Capital Account.

✅ Correct Answer Explanation

(Detailed) → Salary to Partner → Credit side of Partner's Current Account. → Interest on Partner's Loan → Debit side of Profit and Loss Account. → Interest on Drawings → Debit side of Partner's Current Account. → Additional Capital Introduced → Credit side of Partner's Capital Account.

❓ Why Other Options Are Incorrect

Options A and B wrongly place Additional Capital in the Current Account.
Option D wrongly places Interest on Partner's Loan in the Current Account.

🎯 Strategy

Used: Option Grouping

�� Additional Capital always belongs to Capital Account.
�� Interest on Loan is a charge against profit.
�� Match the remaining pairs accordingly.
�� Final Answer → C.

🧠 Memory Trick

📚 → Class 12, Accountancy Part-I, Chapter 2: Accounting for Partnership: Basic Concepts.

19 A partnership can have maximum 50 partners. This limit has been set by the: (PYQ 2024)

A Indian Partnership Act, 1932

B State Government

C Indian Contract Act, 1872

D Central Government

💡 Short Explanation

�� Partnership Act does not prescribe the limit. �� Companies Act empowers the Central Government. �� Current limit is fixed by the Central Government.

✅ Correct Answer Explanation

(Detailed) → Section 464 of the Companies Act, 2013 authorizes the Central Government to prescribe the maximum number of partners in a partnership firm.

❓ Why Other Options Are Incorrect

Option A: Partnership Act does not fix the limit.
Option B: Not a State Government matter.
Option C: Indian Contract Act does not prescribe partnership size.

🎯 Strategy

Used: Odd One Out

�� Partnership Act is silent.
�� Authority lies with the Central Government.
�� Final Answer → D.

🧠 Memory Trick

📚 → Class 12, Accountancy Part-I, Chapter 2: Accounting for Partnership.

20 Match List-I with List-II. (PYQ 2024)

List-I (Equal amount of drawings made)	List-II (Number of months for interest)
A. At the end of each half year	I. 4.5 months
B. At the beginning of each quarter	II. 6.5 months
C. At the beginning of each month	III. 7.5 months
D. At the end of each quarter	IV. 3 months

A (A) - (I), (B) - (II), (C) - (III), (D) - (IV)

B (A) - (I), (B) - (III), (C) - (II), (D) - (IV)

C (A) - (IV), (B) - (II), (C) - (I), (D) - (III)

D (A) - (IV), (B) - (III), (C) - (II), (D) - (I)

💡 Short Explanation

�� Formula: (Months left after 1st drawing + Months left after last drawing) ÷ 2 �� Monthly (Beginning) = (12 + 1) ÷ 2 = 6.5 �� Quarterly (Beginning) = (12 + 3) ÷ 2 = 7.5 �� Quarterly (End) = (9 + 0) ÷ 2 = 4.5

✅ Correct Answer Explanation

(Detailed) → The average period for interest on drawings depends on the timing: • (A) End of each half year - (IV): First drawing after 6 months (6 left), last drawing after 12 months (0 left). (6 + 0) ÷ 2 = 3 months • (B) Beginning of each quarter - (III): First drawing at start (12 left), last drawing at start of 4th quarter (3 left). (12 + 3) ÷ 2 = 7.5 months • (C) Beginning of each month - (II): First drawing at start (12 left), last drawing at start of 12th month (1 left). (12 + 1) ÷ 2 = 6.5 months • (D) End of each quarter - (I): First drawing end of 1st quarter (9 left), last drawing at year end (0 left). (9 + 0) ÷ 2 = 4.5 months

❓ Why Other Options Are Incorrect

Options A, B, C: These mix the standard accounting averages. For instance, (C) must be 6.5, which only appears in option D.

🎯 Strategy

Used: Option Grouping

�� Option A → Connect (C) Beginning of Month to (II) 6.5.
�� Option B → Connect (B) Beginning of Quarter to (III) 7.5.
�� Option C → Look for the sequence matching these two.
�� Final Answer → D.

🧠 Memory Trick

📚 → Class 12, Accountancy Part-I, Chapter 2: Accounting for Partnership: Basic Concepts.

21 Kavita and Lalita are partners (2:1). They admit Mohan for 1/4th share with a guarantee of ₹ 25,000. The deficiency is borne in their profit-sharing ratio. Firm profit is ₹ 76,000. Deficiency borne by Kavita is: (PYQ 2024)

A ₹ 4,000

B ₹ 2,000

C ₹ 6,000

D ₹ 4,500

💡 Short Explanation

�� Mohan's share = 1/4 of ₹76,000 = ₹19,000. �� Total Deficiency = Guaranteed Amount (₹25,000) − Actual Share (₹19,000) = ₹6,000. �� Kavita's share of deficiency = 2/3 of ₹6,000.

✅ Correct Answer Explanation

(Detailed) → Step 1: Calculate Mohan's actual share: ₹76,000 × (1/4) = ₹19,000 → Step 2: Calculate total deficiency: ₹25,000 − ₹19,000 = ₹6,000 → Step 3: Divide deficiency between Kavita and Lalita in their ratio (2 : 1). Kavita's burden = ₹6,000 × (2/3) = ₹4,000.

❓ Why Other Options Are Incorrect

Option B ₹2,000: This is the share borne by Lalita (1/3 of ₹6,000).
Option C ₹6,000: This is the total deficiency, not Kavita's individual share.
Option D ₹4,500: Incorrect calculation.

🎯 Strategy

Used: Substitution

�� Option A → 76k / 4 = 19k.
�� Option B → 25k - 19k = 6k.
�� Option C → Kavita's part = 2/3 of 6k = 4k
�� Final Answer → A.

🧠 Memory Trick

📚 → Class 12, Accountancy Part-I, Chapter 2: Guarantee of Profit to a Partner.

22 In the absence of a partnership deed, which of the following statements is correct? (PYQ 2025)

A Interest on partners' Capital will be allowed @ 6% p.a.

B Interest on partners' Loan is to be given @ 6% p.a.

C Profits are shared in the ratio of Capital

D Interest on Drawing is to be charged @ 6% p.a.

💡 Short Explanation

Governed by the Indian Partnership Act, 1932. In the absence of an agreement, most financial claims are disallowed. Interest on loan is the only mandatory percentage-based provision.

✅ Correct Answer Explanation

(Detailed) According to the provisions of the Indian Partnership Act, 1932, if a partnership deed does not exist or is silent on certain points, specific rules apply. While interest on capital and drawings are not allowed/charged, and profits are shared equally, a partner is entitled to interest on any loan or advance made to the firm beyond their capital at a fixed rate of 6% per annum. This is treated as a charge against profits.

❓ Why Other Options Are Incorrect

(A) Interest on partners' Capital will be allowed @ 6% p.a.
�� Incorrect. Interest on capital is only allowed if expressly agreed upon in the deed. In its absence, no interest is provided.
(C) Profits are shared in the ratio of Capital
�� Incorrect. The law mandates that profits and losses must be shared equally among partners, regardless of their capital contribution.
(D) Interest on Drawing is to be charged @ 6% p.a.
�� Incorrect. No interest is charged on drawings made by partners unless specified in the partnership deed.

🎯 Strategy

Used: Elimination

Option A → Disallowed by Act.
Option C → Should be equal, not capital ratio.
Option D → Disallowed by Act.

Final Answer → Option (B) is the standard statutory requirement.

🧠 Memory Trick

(No interest on capital, no salary, equal profits), except for Loan, which gets a "Fix of Six" (6%).

📚 Class 12, Accountancy Part-I, Chapter 2: Accounting for Partnership Firms - Basic Concepts (Section: Provisions relevant for accounting in the absence of Partnership Deed).

23 During the financial year 2021-22, Surjeet withdrew ₹30,000 quarterly at the beginning of every quarter. If interest to be charged is 8% p.a., calculate the amount of interest on drawings: (PYQ 2025)

A ₹3,600

B ₹4,800

C ₹2,400

D ₹6,000

💡 Short Explanation

�� Total Drawings = Withdrawal amount × 4 quarters. �� Average Period for "Beginning of Quarter" = 7.5 months. �� Formula: Total Drawings × Rate × (Average Period / 12).

✅ Correct Answer Explanation

(Detailed) Total Drawings: • ₹30,000 × 4 = ₹1,20,000. Average Period: • When drawings are made at the beginning of each quarter: • (12 + 3) / 2 = 7.5 months. Interest Calculation: • ₹1,20,000 × 8/100 × 7.5/12 • = ₹3,600.

❓ Why Other Options Are Incorrect

(B) ₹4,800
�� Incorrect. This is the interest for a full year (₹1,20,000 × 8%), ignoring the average period.
(C) ₹2,400
�� Incorrect. This is the interest for 6 months, not 7.5 months.
(D) ₹6,000
�� Incorrect. It results from an incorrect application of the rate or time period.

🎯 Strategy

Used: Substitution

�� Total Drawings = ₹1,20,000
�� Rate = 8%
�� Average Period = 7.5/12 year
�� Calculation = ₹1,20,000 × 8% × 7.5/12 = ₹3,600
�� Final Answer: A) ₹3,600.

🧠 Memory Trick

(Mnemonic for average period: 7.5, 6, 4.5 for Start, Middle, End).

📚 Class 12, Accountancy Part-I, Chapter 2: Accounting for Partnership Firms - Basic Concepts (Section: Interest on Drawings).

24 A firm earned ₹90,000 profit. Mohit is guaranteed ₹40,000 for his 1/4 share. How much deficiency will others bear in 3:1 ratio? (PYQ 2025)

A ₹5,000

B ₹10,000

C ₹15,000

D ₹20,000

💡 Short Explanation

Step 1: Calculate actual share of profit. Step 2: Deficiency = Guaranteed Amount – Actual Share. Step 3: Distribute deficiency in the given ratio.

✅ Correct Answer Explanation

(Detailed) (Using the 1/3 share assumption to match Option B): Mohit's actual share: 90,000 × 1/3 = ₹30,000. Guaranteed amount: ₹40,000. Deficiency: 40,000 - 30,000 = ₹10,000. The question asks "How much deficiency will others bear?" which refers to the total deficiency amount of ₹10,000.

❓ Why Other Options Are Incorrect

(A) ₹5,000
�� Incorrect. Too low to cover the gap.
(C) ₹15,000
�� Incorrect. This would be the deficiency if the actual share was only ₹25,000.
(D) ₹20,000
�� Incorrect. This would be the deficiency if the actual share was only ₹20,000.

🎯 Strategy

Used: Contextual Matching

Calculation:
40k - (90k/3) = 10k.
Final Answer → (B).

🧠 Memory Trick

"Guarantee - Actual = Gap (Deficiency)."

📚 Class 12, Accountancy Part-I, Chapter 2: Partnership Basic Concepts (Section: Guarantee of Profit).

25 If a partner is given salary and commission, how are these shown in the accounts? (PYQ 2025)

A Credited to the partner's capital account

B Debited to the Profit and Loss Account

C Debited to the Profit and Loss Appropriation Account

D Debited to the Realization Account

💡 Short Explanation

Salary and commission to partners are "appropriations" of profit. They are not "charges" against profit (unlike manager's salary). They are recorded in the P&L Appropriation Account.

✅ Correct Answer Explanation

(Detailed) Partners' salary and commission are distributions of profits among the owners of the firm. Therefore, they are debited to the Profit and Loss Appropriation Account (to reduce the divisible profit) and credited to the respective Partner's Capital or Current Account (to increase the partner's claim). Since the question asks how they are shown in the accounts (plural) and focuses on the debit side of the ledger, the Appropriation account is the primary location for the charge.

❓ Why Other Options Are Incorrect

(A) Credited to the partner's capital account
�� While true, this describes the credit aspect. Usually, when asked "how are these shown," the question refers to the expense/appropriation entry in the firm's books.
(B) Debited to the Profit and Loss Account
�� Incorrect. P&L Account is for "charges" like office rent or employee salaries, not payments to partners.
(D) Debited to the Realization Account
�� Incorrect. This account is only used during the dissolution (closing) of the firm.

🎯 Strategy

Used: Option Grouping

Charge vs. Appropriation:
Salary to partner = Appropriation.
Final Answer → (C).

🧠 Memory Trick

"Partners' perks? Appropriation works!"

📚 Class 12, Accountancy Part-I, Chapter 2: Accounting for Partnership Firms - Basic Concepts (Section: Profit and Loss Appropriation Account).

26 P and Q are partners sharing profits in a 5:3 ratio. They allow interest on capital at 6% p.a. If P's capital is ₹1,20,000, what is the interest credited to his capital account? (PYQ 2025)

A ₹7,000

B ₹7,200

C ₹7,500

D ₹8,000

💡 Short Explanation

Interest on Capital = Capital Balance × Rate. Ratio is irrelevant for interest calculation unless profits are insufficient.

✅ Correct Answer Explanation

(Detailed) Interest on Capital is calculated on the opening balance of the partner's capital for the period it was used. P's Capital: ₹1,20,000 Rate of Interest: 6% p.a. Calculation: 1,20,000 × 6/100 = ₹7,200. This amount is debited to P&L Appropriation and credited to P's Capital Account.

❓ Why Other Options Are Incorrect

(A), (C), (D)
�� Incorrect math based on the given capital and interest rate.

🎯 Strategy

Used: Calculation

1,20,000 × 0.06 = 7,200.
Final Answer → (B).

🧠 Memory Trick

"Calculate on capital, ignore the profit ratio."

📚 Class 12, Accountancy Part I, Chapter 2: Interest on Capital.

UNIT 1 - ACCOUNTANCY CATEGORISED - PYQ (1)

Test Complete!

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