4. Statement 1: The newly formed partnership is still allowed to use any of the book of the sole proprietors. Statement 2: In a limited partnership, all partners are limited partner. Statement 1 Statement 2 A. False False B. False True C. True False D. True True 5. Statement 1: Personal withdrawals by a partner in anticipation of profits are not viewed as permanent in character. Statement 2: When a partner borrows money from the partnership, it can be charged to partner’s receivable account rather than as a trade receivable or customer’s advances. Statement 1 Statement 2 A. False False B. False True C. True False D. True True 6. Statement 1: The profit in a partnership business is closed to partner’s drawing accounts and not to capital accounts. Statement 2: The amount of loan extended by partners to the partnership can be recorded either as partner’s loan payable or trade payable, anyway both signifies partnership obligations. Statement 1 Statement 2 A. False False B. False True C. True False D. True True
Partnership Accounting
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings, admission of a new partner, etc.
Partner Admission and Withdrawal
A partnership is a kind of arrangement between two or more people whereby they agree to manage the business operations and share its profits and losses in an agreed ratio between them. The agreement that is drafted and signed by the partners of the firm is termed as a partnership deed and contains various important clauses agreed between the partners such as profit/loss sharing, interest on capital, remuneration allocation of each partner, drawings of a partner, etc.
4. Statement 1: The newly formed
Statement 2: In a limited partnership, all partners are limited partner.
Statement 1 Statement 2
A. False False
B. False True
C. True False
D. True True
5. Statement 1: Personal withdrawals by a partner in anticipation of profits are not viewed as permanent in
character.
Statement 2: When a partner borrows money from the partnership, it can be charged to partner’s receivable
account rather than as a trade receivable or customer’s advances.
Statement 1 Statement 2
A. False False
B. False True
C. True False
D. True True
6. Statement 1: The profit in a partnership business is closed to partner’s drawing accounts and not to capital
accounts.
Statement 2: The amount of loan extended by partners to the partnership can be recorded either as partner’s
loan payable or trade payable, anyway both signifies partnership obligations.
Statement 1 Statement 2
A. False False
B. False True
C. True False
D. True True
Kindly answer correctly the questions by choosing a letter with explanation. Thank you
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