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Asked/Added Questions From NCERT:


Question 1. Asked on :06 October 2020:12:17:34 PM

Write the difference between Drawings against Capital and Drawings against Profit?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh

 Basis 

Drawings Against Profit

Drawings Against Capital

1.Where Debited 

It is debited to Drawings Account.

It is debited to Capital Account. 

2. Part

It is a part of expected profit.

It is a part of capital. 

3.Effect

It does not reduce capital.

It reduces capital. 

4.Interest on Drawings

It is considerd for calculating interest on drawings.

It is not considerd for calculating interest on drawings. 

5.Interest on Capital

It is not considerd for calculating interest on capital.

It is considerd for calculating interest on capital. 


-Answered by nisha sheikh On 06 October 2020:12:51:21 PM


Question 2. Asked on :06 October 2020:12:15:19 PM

What is the meaning of Drawings against Capital?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh
Drawings against capital means withdrawal by a Partner out of his or her capital. Interest on capital is allowed on the capital for the period it is used.Therefore, interest is not allowed ,i.e., paid on the amount of capital withdrawn.

-Answered by nisha sheikh On 06 October 2020:12:39:58 PM


Question 3. Asked on :06 October 2020:12:09:18 PM

 Write the difference between Profit and Loss Account and Profit and Loss Appropriation Account?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh

 

Basis 

Profit and Loss Account

Profit and Loss Appropriation Account 

1. 

Stages of preparation

It is prepared after Trading Account and Therefore,starts with Gross Profit and Gross Loss transffered from Trading Account. 

It is prepared after Profit and Loss Account and therefore, starts with Net Profit or Net Loss as transferred from the Profit and Loss Account.

2. 

Objective 

It determines Net Profit earned or Net Loss Incurred during the Accounting Year.

It shows Appropriation of Net Profit i.e., distribution of Net Profit for the Accounting Period among the Partners.

3. 

Nature of Items 

It is debited with the expenses and credited with the income, not being business income to determine net profit for accounting period.

It is debited with the items of appropriation of profit like salary, commission, interest on capital, transfer to reserve, etc. and credited with the items of income being debited to Partners’ Capital Account or Current Accounts such as interest on drawings

4. 

Partnership Deed

This account is not guided by the Partnership Deed or Agreement.

This account is prepared as guided by the Partnership Deed or Agreement or provisions of Indian Partnership Act, 1932.

5. 

Matching Principle 

It follows the Matching Principle where revenue is matched against expense.

It does not follow the Matching Principle.

-Answered by nisha sheikh On 06 October 2020:03:06:40 PM


Question 4. Asked on :06 October 2020:12:05:55 PM

 What is the nature of Interest on Partner's Loan?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh

Interest on Partner's loan is a charge against Profit. 

-Answered by nisha sheikh On 07 October 2020:11:14:05 AM


Question 5. Asked on :06 October 2020:12:04:22 PM

 Write the beneits of LLP?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh

Benefits of LLP:

  • It is more flexible as compared to a company to organise internal structure.
  • There is no maximum limit for the number of partners in LLP. In a private limited company, number of shareholders is limited to 200 shareholders excluding past and present employee shareholders.
  • Raising and utilisation of funds depends on the partner' will as against norms precribed in the Companies Act, 2013 as applicable to companies.

-Answered by nisha sheikh On 07 October 2020:11:23:49 AM


Question 6. Asked on :06 October 2020:12:03:12 PM

 Write the characteristics of a LLP?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh
Characteristics of LLP:

  • Separate Legal Entity
  • Minimum Capital
  • Minimum number of Members
  • Audit is not Mandatory.

-Answered by nisha sheikh On 07 October 2020:11:31:45 AM


Question 7. Asked on :06 October 2020:11:55:52 AM

Write the full form of LLP?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh

Limited Liability Partnership.

-Answered by nisha sheikh On 07 October 2020:11:34:12 AM


Question 8. Asked on :06 October 2020:11:48:08 AM

 Write the importance of Partnership Deed?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh

  1. It governs the rights, duties and liabilities of each partner.
  2. Disputes arising, if any, among the partners are settled on the basis of Partnership Deed, it being a written contract.

-Answered by nisha sheikh On 07 October 2020:12:17:55 PM


Question 9. Asked on :06 October 2020:11:42:09 AM

Define Firm Name?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh
The name under which the business is carried is called Firm Name.

-Answered by nisha sheikh On 07 October 2020:12:07:25 PM


Question 10. Asked on :06 October 2020:11:39:16 AM

 Define Firms?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh

firm is a for-profit business organization.

-Answered by nisha sheikh On 07 October 2020:12:01:22 PM


Question 11. Asked on :06 October 2020:11:34:59 AM

 Define Partners?

-Added by nisha sheikh Accountancy » Accounting For Partnership Firms: Fundamentals

Answer:

nisha sheikh
The persons who have entered into a partnership with one another individually are called Partners.

-Answered by nisha sheikh On 07 October 2020:11:57:49 AM


 

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