1. Partnership is an association of ....... or more persons.

two
three
four
five
2. Persons who form and manage the partnership are collectively called
as .......
Partner
firm
company
union
4. Minimum ......... persons are required to form a partnership.
two
three
seven
5. Maximum........ persons are required to form partnership having trading
business.
two
seven
ten
twenty
6. Maximum........ persons are required to form a partnership having banking
business.
two
seven
ten
twenty

7. The liability of partner in firm is .........

limited
unlimited
limited by shares
limited by guarantee
8. A partner who takes active part in the management of business is known
as ....... partner.
active
sleeping
nominal
partner in profit only
9. A partner who contibutes capital but do not participate in business affairs
is known as ........
active
sleeping
nominal
minor
10. A partner who only lends his name to firm is known as .......
active
sleeping
nominal
minor
11. The drawings of partners are transferred to ........... Accounts.
Trading
Partner's Capital
Profit and Loss
Bank

12. Gross Profit is transferred to ....... Accounts.

Trading
Profit and Loss
Partner's Capital
Balance Sheet
13. ...........is transferred to Partner's Capital Accounts.
Gross Profit
Gross Loss
Net Profit
Direct Expenses
14. Under .......... capital method only Capital Account of Partners is opened.
fixed
fluctuating
single
double
15. Debit balance of current account of a partner appears on .......... side of
balance sheet.
liability
asset
debit
credit
16. ............ is a statement of balances of ledger accounts.
Statement of Affairs
Trial Balance
Final Account
Balance Sheet
17. In the absense of partnership deed the partners share profits and losses

in the .......... ration.

agreed
equal
capital
initial contribution
18. When the closing balance of capital accounts of parents of partners
changes every year it is known as .......... method.
Fixed
Fluctuating
Increasing
Decreasing
20. Interest on drawings are debited to ........ account under fixed capital
method.
Trading
Partner's Capital
Partner's Current
Profit and Loss
21. Partnership business must be .........
legal
illegal
voluntary
co-operative
22. The interest on capital of a partner is debited to .......... account.
Trading
Profit and Loss
Partner's Capital
Bank

23. Partners are ........... liable for the debts of the firm.

individually
jointly
severally

24. Income received in advance is shown on ....... side of Balance Sheet.

asset
liability
debit
credit

25. A provision made for debts irrecoverable from the debtors is called...........

Bad debts
Reserve for Doubtful Debts
Reserve for Discount on Debtors
Reserve for Discount on Creditors

26. Prepaid expenses are shown on the .......... side of Balance Sheet.

debit
credit
asset
liability

27. Payment made in advance are shown on ........ side of Balance Sheet.

debit
credit
asset
liability

28. Wages paid for installation of machinery should be debited to .......... A/c.

Wages
Machinery
Trading
Profit and Loss

29. The withdrawals by a partner for personal use from the firm is ........... to
his account.

debited

credited
added
deducted

30. When a partner takes over any asset ...... account is debited.

Partner's Capital
Partner's Loan
Partner's Drawings
Bank

31. When a partner takes over liability his capital account is ...........

debited
credited
reduced
increased
32. The balance of Capital Account remains constant under ......... capital
method.
fixed
fluctuating
blocked
semi-blocked
33. Royalty on production is debited to ..... A/c.
Trading

Profit and Loss

Partner's Capital
Balance Sheet