A 'Sleeping Partner' is one who: MCQ with Answer and Explanation

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A 'Sleeping Partner' is one who:

A. Has unlimited liability only

B. Invests capital but does not take part in day-to-day management

C. Guarantees profits

D. Manages the firm

Answer: Option B

Solution (By JKSSB Mock Tests)

Sleeping or dormant partner contributes capital but does not participate in management.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

A Suspense Account is generally closed when:

A. The balance sheet is signed

B. The financial year ends

C. The auditor approves it

D. All errors causing the trial balance difference are rectified

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Correct Answer: Option D

Explanation:
The Suspense Account exists only as a temporary fix. Once all one-sided errors are found and rectified, its balance becomes zero.

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

Question #2

S1: A debit voucher is prepared for cash payments. S2: A journal voucher is prepared for non-cash transactions. Which statement(s) is/are correct?

A. S1 only

B. Both S1 and S2

C. Neither S1 nor S2

D. S2 only

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Correct Answer: Option D

Explanation:
A payment voucher (not debit voucher) is prepared for cash payments. A journal voucher is indeed used for non-cash transactions like depreciation or rectification of errors. S1 is incorrect, S2 is correct.

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

Question #3

Rent paid in advance is considered a(n):

A. Liability

B. Expense

C. Asset

D. Income

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Correct Answer: Option C

Explanation:
Prepaid expenses are considered assets because they provide future economic benefits to the business.

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

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