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 about the concepts of 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
Transfer entry for salary to partners is:
B
Correct Answer: Dr. P&L Appropriation Ac, Cr. Partners' Salary Ac
Transfer Entry: Dr. P&L Appropriation Ac, Cr. Partners' Salary Ac. Salary transferred to P&L Appropriation Account.
Question 2
Journal entry for interest on capital is:
A
Correct Answer: Dr. Interest on Capital Ac, Cr. Partners' Capital/Current Acs
Adjusting Entry: Dr. Interest on Capital Ac, Cr. Partners' Capital/Current Acs (Individually). Interest on capital allowed to partners.
Question 3
Transfer entry for interest on capital is:
B
Correct Answer: Dr. P&L Appropriation Ac, Cr. Interest on Capital Ac
Transfer Entry: Dr. P&L Appropriation Ac, Cr. Interest on Capital Ac. Interest on capital transferred to P&L Appropriation Account.
Question 4
Journal entry for interest on drawings is:
A
Correct Answer: Dr. Partners' Capital/Current Acs, Cr. Interest on Drawings Ac
Adjusting Entry: Dr. Partners' Capital/Current Acs (Individually), Cr. Interest on Drawings Ac. Interest charged on drawings.
Question 5
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 on drawings transferred to P&L Appropriation Account.
Question 6
Entry for transfer of balance distributable profit to partners' accounts is:
A
Correct Answer: Dr. P&L Appropriation Ac, Cr. Partners' Capital/Current Acs
Transfer Entry: Dr. P&L Appropriation Ac, Cr. Partners' Capital/Current Acs (in profit-sharing ratio). Balance profit transferred.
Question 7
Entry for transfer of balance distributable loss to partners' accounts is:
B
Correct Answer: Dr. Partners' Capital/Current Acs, Cr. P&L Appropriation Ac
Transfer Entry: Dr. Partners' Capital/Current Acs (in profit-sharing ratio), Cr. P&L Appropriation Ac. Loss transferred.
Question 8
P&L Appropriation Account is prepared:
B
Correct Answer: After P&L Account
It is prepared after Profit & Loss Account. It starts with net profit or net loss from P&L Account.
Question 9
Preparation of P&L Appropriation Account is guided by:
C
Correct Answer: Partnership Deed or Partnership Act
Preparation of P&L Appropriation Account is guided by the Partnership Deed or Agreement showing appropriations as per the deed.
Correct Answer: No, as it's not applicable to appropriation
Matching Principle is not followed while preparing P&L Appropriation Account as it deals with appropriation, not revenue-expense matching.
Question 11
When net loss plus interest on drawings becomes positive then
A
Correct Answer: Appropriations are made to the extent of (Net Loss + Interest on Drawings)
When net loss plus interest on drawings becomes positive then appropriations are made as usual
Question 12
Journal entry for transfer to General Reserve is:
A
Correct Answer: Dr. P&L Appropriation Ac, Cr. General Reserve Ac
Transfer Entry: Dr. P&L Appropriation Ac, Cr. General Reserve Ac. Amount transferred to reserve from distributable profit.
Question 13
P&L Appropriation Account is prepared for:
A
Correct Answer: The year/accounting period
Profit & Loss Appropriation Account is prepared for the year or accounting period, similar to P&L Account.
Question 14
If question gives Net profit after partner salary then in Profit and Loss Appr A/c credit side we show
B
Correct Answer: Net Profit before partner salary
P&L Appropriation Account shows Net profit before all appropriations. If questions gives Net profit after partner salary then we have to add partner salary to this
Question 15
If firm incurs net loss, which items can still be credited to P&L Appropriation Account?
C
Correct Answer: Interest on drawings
Even if firm incurs loss, interest on drawings can be credited to P&L Appropriation Account as it's based on partners' withdrawals.
