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. The firm has cash

B. The firm makes profit

C. It is mandatory under law

D. It is provided in the partnership deed

Answer: Option D

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

Closing stock is valued at:

A. Cost Price

B. Market (Net Realizable) Value

C. Cost Price or Market Value, whichever is higher

D. Cost Price or Market Value, whichever is lower

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Correct Answer: Option D

Explanation:
Based on the principle of conservatism (prudence), inventory is valued at Cost or Net Realizable Value (Market Value), whichever is less.

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

Question #2

The 'Centralised Processing Centre' (CPC) of Income Tax Department processes returns for:

A. All assesses

B. E-filed returns

C. TDS returns only

D. Paper returns only

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Correct Answer: Option B

Explanation:
CPC processes electronically filed returns for faster processing.

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

Question #3

Under the Written Down Value (WDV) method, if the rate of depreciation is 10% and the original cost is ₹10,000, what is the depreciation for the second year?

A. ₹1,000

B. ₹8,100

C. ₹9,000

D. ₹900

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Correct Answer: Option D

Explanation:
Year 1 depreciation is 10% of ₹10,000 = ₹1,000. The WDV at the start of Year 2 is ₹9,000. Year 2 depreciation is 10% of ₹9,000 = ₹900.

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

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