12th Accountancy - Book Back Answers - Unit 3 - English Medium Guides ~ Kalvi Tips

12th - Accountancy - Book Back Answers - Unit 3 - English Medium

Tamil Nadu Board 12th Standard Accountancy - Unit 3: Book Back Answers and Solutions

This post covers the book back answers and solutions for Unit 3 – from the Tamil Nadu State Board 12th Standard Accountancy textbook. These detailed answers have been carefully prepared by our expert teachers at KalviTips.com.

We have explained each answer in a simple, easy-to-understand format, highlighting important points step by step under the relevant subtopics. Students are advised to read and memorize these subtopics thoroughly. Once you understand the main concepts, you’ll be able to connect other related points with real-life examples and confidently present them in your tests and exams.

By going through this material, you’ll gain a strong understanding of Unit 3 along with the corresponding book back questions and answers (PDF format).

Question Types Covered:

1 Mark Questions: Choose the correct answer,
2 Mark Questions: Very Short Answer Questions
3, 4, and 5 Mark Questions: Short Answer Questions, Excercises

All answers are presented in a clear and student-friendly manner, focusing on key points to help you score full marks.

All the best, Class 12th students! Prepare well and aim for top scores. Thank you!

Topic: Unit 3 :Accounts Of Partnership Firms Fundamentals

I. Choose the correct answers

Question 1.
In the absence of a partnership deed, profits of the firm will be shared by the partners in …………….
(a) Equal ratio
(b) Capital ratio
(c) Both (a) and (b)
(d) None of these
Answer Key:
(a) Equal ratio

Question 2.
In the absence of an agreement among the partners, interest on capital is …………….
(a) Not allowed
(b) Allowed at bank rate
(c) Allowed @ 5% per annum
(d) Allowed @ 6% per annum
Answer Key:
(a) Not allowed

Question 3.
As per the Indian Partnership Act, 1932, the rate of interest allowed on loans advanced by partners is …………….
(a) 8% per annum
(b) 12% per annum
(c) 5% per annum
(d) 6% per annum
Answer Key:
(d) 6% per annum

Question 4.
Which of the following is shown in Profit and loss appropriation account?
(a) Office expenses
(b) Salary of staff
(c) Partners’ salary
(d) Interest on bank loan
Answer Key:
(c) Partners’ salary

Question 5.
When fixed capital method is adopted by a partnership firm, which of the following items will appear in capital account?
(a) Additional capital introduced
(b) Interest on capital
(c) Interest on drawings
(d) Share of profit
Answer Key:
(a) Additional capital introduced

Question 6.
When a partner withdraws regularly a fixed sum of money at the middle of every month, period for which interest is to be calculated on the drawings on an average is …………….
(a) 5.5 months
(b) 6 months
(c) 12 months
(d) 6.5 months
Answer Key:
(b) 6 months

Question 7.
Which of the following is the incorrect pair?
(a) Interest on drawings – Debited to capital account
(b) Interest on capital – Credited to capital account
(c) Interest on loan – Debited to capital account
(d) Share of profit – Credited to capital account
Answer Key:
(c) Interest on loan – Debited to capital account

Question 8.
In the absence of an agreement, partners are entitled to …………….
(a) Salary
(b) Commission
(c) Interest on loan
(d) Interest on capital
Answer Key:
(c) Interest on loan

Question 9.
Pick the odd one out …………….
(a) Partners share profits and losses equally
(b) Interest on partners’ capital is allowed at 7% per annum
(c) No salary or remuneration is allowed
(d) Interest on loan from partners is allowed at 6% per annum.
Answer Key:
(b) Interest on partners’ capital is allowed at 7% per annum

Question 10.
Profit after interest on drawings, interest on capital and remuneration is RS 10,500. Geetha, a partner, is entitled to receive commission @ 5% on profits after charging such commission. Find out commission. …………….
(a) RS 50
(b) RS 150
(c) RS 550
(d) RS 500
Answer Key:
(d) RS 500

II.Very short answer questions

1. Define partnership.

According to Section 4 of the Indian Partnership Act, 1932, partnership is defined as, “the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all”

2. What is a partnership deed?

Partnership deed is a document in writing that contains the terms of the agreement among the partners. It is not compulsory for a partnership.

3. What is meant by fixed capital method?

Under fixed capital method, the capital of the partners is not altered and it remains generally fixed. Two accounts are maintained for each partner namely (a) Capital account and (b) Current account.

4. What is the journal entry to be passed for providing interest on capital to a partner?

Date

Particulars

L.F.

Debit

Credit

Interest on capital A/c Dr.

To Partners Capital / current A/c

xxx

5. Why is Profit and loss appropriation account prepared?

The profit and loss appropriation account is an extension of profit and loss account prepared for the purpose of adjusting the transactions relating to amounts due to and amounts due from partners. It is nominal account in nature. It is credited with net profit, interest on drawings and it is debited with interest on capital, salary and other remuneration to the partners.

III. Short answer questions

1. State the features of partnership.

Partnership is an association of two or more persons. The maximum number of partners is limited to 50.
The agreement must be to carry on a business and to share the profits of the business.
The business may be carried on by all the partners or any of them acting for all.

2. State any six contents of a partnership deed.

Name of the firm and nature and place of business
Date of commencement and duration of business
Names and addresses of all partners
Capital contributed by each partner
Profit sharing ratio
Amount of drawings allowed to each partner

3. State the differences between fixed capital method and fluctuating capital method.

Basis	Fixed capital	Fluctuating capital
1. Number of accounts	Two accounts are maintained for each partner, that is, capital account and current account.	Only one account, that is, capital account is maintained for each partner.
2. Change in capital	The amount of capital normally remains unchanged except when additional capital is introduced or capital is withdrawn permanently.	The amount of capital changes from period to period.
3. Closing balance	Capital account always shows a credit balance. But current account may show either debit or credit balance.	Capital account generally shows credit balance. It may also show a debit balance.

4. Write a brief note on the applications of the provisions of the Indian Partnership Act, 1932 in the absence of partnership deed.

(i) Remuneration to partners - No salary or remuneration is allowed to any partner.

(ii) Profit sharing ratio- Profits and losses are to be shared by the partners equally.

(iii) Interest on capital- No interest is allowed on the capital.

(iv) Interest on loans- advanced by partners to the firm Interest on loan is to be allowed at the rate of 6 per cent per annum.

(v) Interest on drawings - No interest is charged on the drawings of the partners.

IV. Excercises

12th Accountancy