A partner who does not actively participate in the business but is liable to third parties is called: MCQ with Answer and Explanation

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A partner who does not actively participate in the business but is liable to third parties is called:

A. Partner by estoppel

B. Nominal partner

C. Secret partner

D. Sleeping partner

Answer: Option D

Solution (By JKSSB Mock Tests)

Sleeping or dormant partner contributes capital but does not take part in management; still has unlimited liability.

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

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Question #1

GST is a comprehensive indirect tax levied on:

A. Sale of services only

B. Supply of goods and services

C. Import of capital goods only

D. Manufacture of goods only

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Correct Answer: Option B

Explanation:
GST is a destination-based tax on supply of goods and services, replacing multiple indirect taxes.

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

Question #2

Schedule III of Companies Act, 2013 prescribes:

A. Format of Profit & Loss Account

B. Format of Balance Sheet and Profit & Loss Account

C. Audit report format

D. Format of Trial Balance

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Correct Answer: Option B

Explanation:
Schedule III provides the format for presentation of financial statements (Balance Sheet and Statement of Profit and Loss) for companies.

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Question #3

A and B share profits 3:2. They admit C with 1/5th share. C brings ₹30,000 as capital and ₹10,000 as goodwill. The total goodwill of the firm is:

A. ₹2,00,000

B. ₹10,000

C. Cannot determine

D. ₹50,000

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Correct Answer: Option D

Explanation:
C's share of goodwill = 1/5 = ₹10,000. So total goodwill = 10,000 × 5/1 = ₹50,000.

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

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