MCQ Charge vs appropriation - Partnership accounts
This is first quiz on the charge against profits vs appropriation of profits with 15 practice questions. Test your knowledge about the meaning of charge vs appropriation with this MCQ practice test. This quiz contains questions 1-15 covering what is charge in partnership accounts, how it is different from the appropriation of profits. Charge against profits are shown in profit and loss A/c and appropriation of profits is shown in profit and loss appropriation A/c. Answer all questions and get instant feedback with detailed explanations. The quiz suits well for conceptual clarity for your board exams
CBSE MCQ class 12 accounts
The below MCQ test is designed as per the latest syllabus prescribed by CBSE board. With the rise in weightage of MVQ questions, the practice of MCQ questions becomes very important. The quiz is equally useful for students of CUET exams.
How to attempt the online mock test for class 12 accounts
In this online mock test for class 12 accountancy, One by one go through the below questions and select the right option. Do all the questions and in the end press submit. Instantly you will get your score and the explanation against each question. Go through your mistakes and reattempt the quiz any number of times as needed.
MCQ Quiz - Practice Questions
MCQ Quiz
Question 1
Charge against profit means:
B
Correct Answer: An expense paid whether firm earns profit or incurs loss
Charge against profit is an expense for the firm and is paid whether the firm earns profit or incurs loss.
Question 2
Appropriation of profit means:
A
Correct Answer: Distribution of net profit among partners as per Partnership Deed
Appropriation of profit means distribution of net profit and interest on drawings among partners as salary, interest on capital, transfer to reserves, etc. as per Partnership Deed.
Question 3
Interest on loan by partner is:
B
Correct Answer: A charge against profit
Interest on loan by partner is a charge against profit. It is paid whether the firm earns profit or incurs loss.
Question 4
Salary to partners is:
C
Correct Answer: An appropriation of profit
Salary to a partner is not a charge against profit but is an appropriation of profit allowed if Partnership Deed permits and firm has earned profit.
Question 5
Which account is debited for charge against profit?
B
Correct Answer: Profit & Loss Account
Charge against profit is transferred to the debit of Profit & Loss Account to determine net profit or loss for the year.
Question 6
Which account is debited for appropriation of profit?
A
Correct Answer: Profit & Loss Appropriation Account
Appropriation of profit is transferred to the debit of Profit & Loss Appropriation Account after determining net profit.
Question 7
Rent paid to a partner for use of his property is:
C
Correct Answer: A charge against profit
Rent paid or payable to a partner is a charge against profit because rent is payable as his personal property is used for business.
Question 8
Interest on capital is:
B
Correct Answer: An appropriation of profit unless specified as charge
Interest on capital is normally an appropriation of profit. It is transferred to debit of Profit & Loss Appropriation Account unless specified as charge.
Question 9
Manager's commission is:
B
Correct Answer: A charge against profit
Manager's commission is a charge against profit as manager is an employee and commission is payable whether firm earns profit or incurs loss.
Question 10
Commission to partners is:
B
Correct Answer: An appropriation of profit
Commission to partners is an appropriation of profit, transferred to the debit of Profit & Loss Appropriation Account.
Question 11
Charge against profit is allowed:
B
Correct Answer: Whether firm earns profit or incurs loss
Charge against profit is an expense and is allowed whether the firm earns profit or incurs loss.
Question 12
Appropriation of profit is made:
C
Correct Answer: Only if firm earns profit or has distributable profit
Appropriation of profit is made only if the firm has earned profit during the year or has distributable profit.
Question 13
Which has priority in payment?
B
Correct Answer: Charge against profit
Charge against profit is allowed before appropriation of profit. It is recorded before determining net profit.
Question 14
Interest on drawings is:
C
Correct Answer: Credited to P&L Appropriation Account
Interest on drawings is credited to Profit & Loss Appropriation Account as it increases the distributable profit.
Question 15
Transfer to General Reserve is:
C
Correct Answer: An appropriation of profit
Transfer to reserve is an appropriation of profit, debited to Profit & Loss Appropriation Account as distribution of profit.
