A partner who lends money to the firm is entitled to: MCQ with Answer and Explanation

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A partner who lends money to the firm is entitled to:

A. Salary

B. Bonus

C. Interest on loan at 6% p.a.

D. Share of profit

Answer: Option C

Solution (By JKSSB Mock Tests)

In absence of agreement, a partner is entitled to interest on loan advanced to the firm at 6% per annum as per Partnership Act, 1932.

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

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Question #1

Examining documentary evidence to ascertain the accuracy and authenticity of transactions is called:

A. Valuation

B. Vouching

C. Internal checking

D. Verification

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Correct Answer: Option B

Explanation:
Vouching is the practice of checking the entries in the books of accounts with supporting documents (vouchers) to prove their accuracy.

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Question #2

If a partner retires, the balance in his capital account is either paid off or transferred to his:

A. Loan Account

B. Suspense Account

C. Drawings Account

D. Current Account

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Correct Answer: Option A

Explanation:
If the firm cannot pay cash immediately, the retiring partner's dues are transferred to a Loan Account, carrying an interest of 6% p.a.

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

Question #3

The term 'Noting Charges' is associated with:

A. Bills of exchange

B. Voucher system

C. Bank reconciliation

D. Depreciation

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Correct Answer: Option A

Explanation:
Noting charges are paid to notary public for recording dishonour of a bill.

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

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