MCQ Profit and Loss Appropriation A/c - Partnership accounts
This quiz on the Profit and loss appropriation A/c with 15 practice questions. Test your knowledge get the conceptual clarity on profit and loss appropriation A/c with this MCQ practice test. This quiz contains questions 1-15 covering what is profit and loss appropriation account, what are the journal entries and typical cases related to profit and loss appropriation A/c. 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 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
Profit and Loss Appropriation Account is:
A
Correct Answer: An extension of Profit & Loss Account
Profit & Loss Appropriation Account is an extension of the Profit & Loss Account prepared by partnership firms.
Question 2
Profit & Loss Appropriation Account is prepared by:
B
Correct Answer: Partnership firms
Profit & Loss Appropriation Account is prepared by partnership firms to show appropriation of net profit among partners.
Question 3
The main objective of preparing P&L Appropriation Account is:
C
Correct Answer: To show distribution of net profit among partners
It is prepared to show appropriation of net profit, i.e., distribution of Net Profit or Net Loss for the year among partners.
Question 4
P&L Appropriation Account starts with:
C
Correct Answer: Net profit or net loss from P&L Account
It is prepared after P&L Account. It starts with Net Profit in credit side or Net Loss in debit side as per P&L Account.
Question 5
Net profit is transferred to P&L Appropriation Account by:
A
Correct Answer: Debiting P&L Ac and Crediting P&L Appropriation Ac
For transfer of profit: Dr. Profit & Loss Ac, Cr. Profit & Loss Appropriation Ac (Profit for the year transferred).
Question 6
Net loss is transferred to P&L Appropriation Account by:
B
Correct Answer: Debiting P&L Appropriation Ac and Crediting P&L Ac
For transfer of loss: Dr. Profit & Loss Appropriation Ac, Cr. Profit & Loss Ac (Loss for the year transferred).
Question 7
Which item is debited to P&L Appropriation Account?
B
Correct Answer: Interest on capital
Interest on capital, salary to partners, commission to partners, and transfer to reserves are debited to P&L Appropriation Account.
Question 8
Which item is credited to P&L Appropriation Account?
C
Correct Answer: Interest on drawings
Interest on drawings is credited to P&L Appropriation Account as it increases the distributable profit.
Question 9
Interest on capital is recorded in P&L Appropriation Account on:
B
Correct Answer: Debit side
Interest on capital is an appropriation of profit, hence debited to P&L Appropriation Account (unless specified as charge).
Question 10
Salary to partners is shown on which side of P&L Appropriation Account?
C
Correct Answer: Debit side
Salary to partners is an appropriation of profit, hence transferred to the debit of P&L Appropriation Account.
Question 11
Transfer to General Reserve is shown on:
C
Correct Answer: Debit side of P&L Appropriation Account
Transfer to reserve is an appropriation of profit, debited to P&L Appropriation Account.
Question 12
Commission to partners is:
A
Correct Answer: Debited to P&L Appropriation Account
Commission to partners is an appropriation of profit, transferred to the debit of P&L Appropriation Account.
Question 13
Balance distributable profit after all appropriations is transferred to:
C
Correct Answer: Partners' Capital/Current Accounts in profit-sharing ratio
Balance profit is transferred to Partners' Capital/Current Accounts individually in their profit-sharing ratio.
Question 14
If total appropriations exceed available profit:
C
Correct Answer: Profits are distributed in the ratio of Appropriations
If total appropriations exceed available profit then a new ratio is calculated of all the appropriations and available profits are distributed in this ratio
Question 15
The journal entry for allowing salary to partners is:
A
Correct Answer: Dr. Partners' Salary Ac, Cr. Partners' Capital/Current Acs
Adjusting Entry: Dr. Partners' Salary Ac, Cr. Partners' Capital/Current Acs (Individually). Salary allowed to partners.
