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 like product method and average period method, how to calculate average period 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
If partner withdraws uniform amount in the beginning of each month, average period is:
C
Correct Answer: 6.5 months
When uniform amount is withdrawn in the beginning of each month, average period is 6.5 months [(12+1)/2].
Question 2
If partner withdraws uniform amount at the end of each month, average period is:
A
Correct Answer: 5.5 months
When uniform amount is withdrawn at the end of each month, average period is 5.5 months [(11+0)/2].
Question 3
If partner withdraws uniform amount in the middle of each month, average period is:
B
Correct Answer: 6 months
When uniform amount is withdrawn in the middle of each month, average period is 6 months [(11.5+0.5)/2].
Question 4
If partner withdraws uniform amount in the beginning of each quarter, average period is:
D
Correct Answer: 7.5 months
When uniform amount is withdrawn in the beginning of each quarter, average period is 7.5 months [(12+3)/2].
Question 5
If partner withdraws uniform amount at the end of each quarter, average period is:
B
Correct Answer: 4.5 months
When uniform amount is withdrawn at the end of each quarter, average period is 4.5 months [(9+0)/2].
Question 6
If partner withdraws uniform amount in the middle of each quarter, average period is:
C
Correct Answer: 6 months
When uniform amount is withdrawn in the middle of each quarter, average period is 6 months [(10.5+1.5)/2].
Question 7
If date of drawings is not given, interest on drawings is calculated for:
B
Correct Answer: 6 months (half of accounting period)
If date of drawings is not given, interest on total drawings is calculated for 6 months assuming drawings are even throughout year.
Question 8
If rate of interest is given without the word 'per annum' (p.a.):
A
Correct Answer: Interest is charged without considering time factor
When rate of interest is given without 'per annum', interest is charged without considering the time factor.
Question 9
Interest on drawings is debited to:
B
Correct Answer: Partner's Capital/Current Account
Interest on drawings is debited to Partner's Capital Account (Fluctuating) or Current Account (Fixed Capital Method).
Question 10
Journal entry for charging interest on drawings is:
A
Correct Answer: Dr. Partners' Capital/Current Acs, Cr. Interest on Drawings Ac
Adjusting Entry: Dr. Partners' Capital/Current Acs, Cr. Interest on Drawings Ac. Interest charged on drawings.
Question 11
Transfer entry for interest on drawings is:
B
Correct Answer: Dr. Interest on Drawings Ac, Cr. P&L Appropriation Ac
Transfer Entry: Dr. Interest on Drawings Ac, Cr. P&L Appropriation Ac. Interest transferred to credit of P&L Appropriation Account.
Question 12
Difference between drawings against capital and drawings against profit is based on:
A
Correct Answer: Which account is debited and effect on capital
Main difference is drawings against capital is debited to Capital Account while drawings against profit is debited to Drawings Account.
Question 13
In Product Method, products are calculated by:
B
Correct Answer: Multiplying each drawing with number of months it is drawn
In Product Method, each drawing amount is multiplied by the number of months from date of withdrawal to year end.
Question 14
If uniform amount is withdrawn in first 6 months in the beginning of each month, average period is:
C
Correct Answer: 9 months
When uniform amount is withdrawn in first 6 months at beginning of each month, average period is 9 months [(12+7)/2].
Question 15
Interest on drawings increases:
C
Correct Answer: Distributable profit available for partners
Interest on drawings increases the distributable profit as it is credited to P&L Appropriation Account.
