A partner's current account will have a credit balance if: MCQ with Answer and Explanation

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A partner's current account will have a credit balance if:

A. He has withdrawn all profits

B. Firm incurs loss

C. His drawings exceed his share of profit

D. His share of profit and interest on capital exceed his drawings

Answer: Option D

Solution (By JKSSB Mock Tests)

Current account credit balance indicates net amount owed by firm to partner, i.e., profits and interest etc. exceed drawings.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

In a bank reconciliation, a 'Direct deposit by customer' into bank not recorded in cash book will:

A. Be adjusted in passbook

B. Decrease cash book balance

C. Increase cash book balance

D. No effect

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Correct Answer: Option C

Explanation:
When starting with cash book balance, direct deposit increases bank balance, so add to cash book to reconcile with passbook.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The 'Minimum Alternate Tax' (MAT) is applicable to:

A. All taxpayers

B. Individuals

C. Partnership firms

D. Companies paying low or no tax due to exemptions

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Correct Answer: Option D

Explanation:
MAT ensures that companies with substantial book profits pay at least a minimum amount of tax.

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Question #3

Which of the following books is known as the 'Principal Book' of accounts?

A. Cash Book

B. Ledger

C. Journal

D. Trial Balance

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Correct Answer: Option B

Explanation:
The ledger is the principal or chief book of accounts because all financial data is ultimately classified and summarized there.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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