In a partnership, interest on capital is allowed only when: MCQ with Answer and Explanation

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In a partnership, interest on capital is allowed only when:

A. It is mandatory under law

B. The firm has cash

C. It is provided in the partnership deed

D. The firm makes profit

Answer: Option C

Solution (By JKSSB Mock Tests)

Interest on capital is payable only if the partnership deed so provides, and only out of profits.

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

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Question #1

Which of the following is a recent development in accounting?

A. Handwritten journals

B. Blockchain-based triple-entry accounting

C. Paper vouchers

D. Manual ledger posting

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Correct Answer: Option B

Explanation:
Blockchain is an emerging technology enabling triple-entry accounting, enhancing transparency and security.

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

Question #2

The 'National Company Law Tribunal' (NCLT) deals with:

A. Tax disputes

B. Criminal cases

C. Labour disputes

D. Company law matters including insolvency and merger

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Correct Answer: Option D

Explanation:
NCLT adjudicates corporate disputes, mergers, winding up, etc.

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Question #3

If BRS is prepared starting with a credit balance as per Cash Book (overdraft), interest allowed by the bank will be:

A. Deducted

B. Added

C. Not treated in BRS

D. Treated as an error

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Correct Answer: Option A

Explanation:
Interest allowed reduces the actual bank overdraft (Pass book). To make the Cash book overdraft match this lower figure, it must be deducted.

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

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