Which of the following statements is correct? MCQ with Answer and Explanation

Which of the following statements is correct?
A. Partners are entitled to salary if deed provides
B. A minor can be a full-fledged partner
C. Partners share profits equally always
D. Partners get interest on capital in all circumstances
Answer: Option A
Solution (By JKSSB Mock Tests)
Salary to partners is allowed only if partnership deed provides. Interest on capital is not automatic. Profits sharing can be unequal. Minor cannot be a partner, only admitted to benefits.

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Practice More Accountancy and Book Keeping Questions

Question #1
Which of the following is a 'Cash Equivalent'?
A. Short-term, highly liquid investments with maturity 3 months or less
B. Debtors
C. Inventory
D. Bank deposits with maturity more than 12 months

Correct Answer: Option A


Explanation:
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value.

Question #2
A: Financial management aims to maximize shareholder wealth. R: Financial management focuses solely on raising funds. Choose the correct option.
A. A is false but R is true
B. Both A and R are true and R is the correct explanation of A
C. A is true but R is false
D. Both A and R are true but R is NOT the correct explanation of A

Correct Answer: Option C


Explanation:
The primary objective of financial management is to maximize shareholder wealth. However, it involves not just raising funds, but also their effective utilization, dividend decisions, and working capital management. A is true, R is false.

Question #3
Goods given away as charity should be credited to:
A. Purchases Account
B. Sales Account
C. Cash Account
D. Charity Account

Correct Answer: Option A


Explanation:
Donating goods reduces the stock of purchased goods. Thus, the Purchases account is credited at cost price.