MCQ Interest on Partners Drawings - Partnership accounts
This quiz on the interest on partners drawings with 15 practice questions. Test your knowledge about the partnership accounts - Fundamentals , concepts of interest on partners drawings, how it is calculated, what are its journal entries, different methods of calculating interest on partners drawings etc. The quiz suits well for conceptual clarity for your board exams
CBSE class 12 accountancy MCQ questions
The below MCQ test is designed as per the latest syllabus prescribed by CBSE board. With the rise in weightage of MCQ questions, the practice of MCQ questions becomes very important. The quiz is equally useful for students of CUET exams.
How to attempt the quiz
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
Interest on drawings is:
A
Correct Answer: Return charged from partners on amount withdrawn for personal use
Interest on drawings is charged from partners on the amount withdrawn by them for personal use during the year.
Question 2
Interest on drawings is charged:
B
Correct Answer: Only if Partnership Deed provides for it
Interest on drawings is charged if Partnership Deed provides for it or partners agree to charge it.
Question 3
In absence of Partnership Deed, interest on drawings is:
B
Correct Answer: Not charged
As per Partnership Act, 1932, interest on drawings is not charged in the absence of Partnership Deed.
Question 4
The nature of interest on drawings is:
C
Correct Answer: An appropriation of profit
Interest on drawings is an appropriation of profit that increases the distributable profit of the firm.
Question 5
Interest on drawings is transferred to:
C
Correct Answer: Credit of P&L Appropriation Account
Interest on drawings is transferred to the credit of Profit & Loss Appropriation Account as it increases profit.
Question 6
Drawings mean:
C
Correct Answer: Amount withdrawn by partner for personal use
Drawings mean the amount withdrawn in cash or in kind by partners for their personal use.
Question 7
Drawings may be:
A
Correct Answer: Against capital or against profit
Drawings may be out of capital (withdrawal of capital) or against profit for the year.
Question 8
Drawings against capital are recorded in:
C
Correct Answer: Capital Account
Drawings against capital are debited to Partners' Capital Account as they reduce the capital invested.
Question 9
Under fixed method Drawings against profit are recorded in:
C
Correct Answer: Current Account
Under fixed method Drawings against profit are debited to Current Account.
Question 10
Interest on drawings against capital is:
A
Correct Answer: Not charged as capital withdrawal is considered for interest on capital
Interest is not charged on drawings against capital. Capital withdrawal is considered while calculating interest on capital.
Question 11
Interest on drawings against profit is:
B
Correct Answer: Charged if Partnership Deed provides for it
Interest on drawings against profit is charged if Partnership Deed provides for it or partners agree to charge it.
Question 12
Interest on drawings is calculated from:
B
Correct Answer: Date of withdrawal to end of accounting year
Interest on drawings is calculated from the date of withdrawal till the end of the financial/accounting year.
Question 13
Methods of calculating interest on drawings are:
B
Correct Answer: Product Method and Average Period Method
Two methods for calculating interest on drawings are Product Method and Average Period Method.
Question 14
Product Method is used when:
D
Correct Answer: Can be use in all cases of drawings
Product Method is universal and can be used to calculate interest on any kind of drawings whethere different or same amounts and whether different or same intervals
Question 15
Average Period Method is used when:
C
Correct Answer: Uniform amount withdrawn at regular intervals
Average Period Method is used when uniform (same) amount is withdrawn at regular intervals.
