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Book-Keeping and Accountancy · Class 12 Commerce

Ch 1Introduction to Partnership and Partnership Final Accounts — Class 12 Book-Keeping and Accountancy, concept-first.

Individual, sole-proprietorship businesses often reach a point where more capital, more skill, or simply more hands are needed than one owner alone can provide. When two or more such persons agree to come together, contribute capital and/or skill, and run a business jointly for mutual profit, the resulting form of busi…

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Key concepts

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Partnership — Meaning, Features and the Indian Partnership Act, 1932

Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all (Section 4, Indian Partnership Act, 1932).

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Chapter contents

The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.

1

Meaning, Definition and Features of Partnership

Individual, sole-proprietorship businesses often reach a point where more capital, more skill, or simply more hands are needed than one owner alone can provide.

2

The Partnership Deed

A partnership is founded on agreement, and the terms of that agreement are best not left to memory, or to whatever the Indian Partnership Act, 1932 provides by default.

3

Rules Applicable in the Absence of a Partnership Deed

Not every partnership has a written deed, and even a written deed may be silent on a particular point.

4

Methods of Maintaining Partners' Capital Accounts

Every partner's Capital Account records that partner's stake in the firm. There are two recognised methods of maintaining these accounts.

5

Profit and Loss Appropriation Account

A partnership's ordinary Profit and Loss Account, prepared exactly as for a sole proprietorship, arrives at the firm's Net Profit (or Net Loss) for the year.

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Partnership Final Accounts — Adjustments and Preparation

Preparing a partnership's final accounts follows exactly the same three-statement structure a student has already met for a sole proprietorship in Class 11 (Trading Account → Profit and Loss Account →…

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Illustration — Complete Partnership Final Accounts

This worked illustration walks through, step by step, exactly the kind of practical problem that appears in the HSC 12th Book-Keeping and Accountancy examination — from a Trial Balance and a set of ad…

Exercises

+Show 7 questions7 questions
  1. Q1Explain the meaning of Partnership. State any five essential features of Partnership.Free
  2. Q2What is a Partnership Deed? State any five contents of a Partnership Deed.Free
  3. Q3State the provisions of the Indian Partnership Act, 1932 that apply in the absence of a Partnership Deed.Free
  4. Q4Distinguish between the Fixed Capital Method and the Fluctuating Capital Method of maintaining Partners' Capital Accounts.Preview
  5. Q5What is a Profit and Loss Appropriation Account? State its format.Preview
  6. Q6Select the most appropriate answer: In the absence of a Partnership Deed, partners are entitled to interest on capital at: (A) 6% per annum…Preview
  7. Q7Select the most appropriate answer: In the absence of a Partnership Deed, interest on a partner's loan to the firm (over and above capital)…Preview

Sample & Board Papers

Sample papers and previous-year board questions for this subject.

+Show 31 questions31 questions
  1. Q1To find out Net Profit or Net Loss of the business __________ account is prepared. (a) Trading (b) Capital (c) Current (d) Profit & LossPreview
  2. Q2Write the word/phrase/term, which can substitute the following sentence. Debit balance of trading account.Preview
  3. Q3Partnership Deed is an _____ of Partnership.Preview
  4. Q4Returns outward are deducted from ______.Preview
  5. Q5Asha and Nisha are partners sharing profits and losses in equal ratio. From the following Trial Balance and adjustments you are required to…Preview
  6. Q6Write the word/phrase/term, which can substitute the following sentence. Credit balance of Profit and Loss Account.Preview
  7. Q7Calculate 12.5% P.A. depreciation on Furniture: on ₹ 2,20,000 for 1 year on ₹ 10,000 for 6 monthsPreview
  8. Q8Do you agree/disagree with the following statement: Partnership is an association of two or more persons. (a) Agree (b) DisagreePreview
  9. Q9Maximum number of Partners in a firm are ______ according to Companies Act 2013. (a) 10 (b) 25 (c) 20 (d) 50Preview
  10. Q10Varsha and Harsha are partners sharing profits and losses in their capital ratio. You are required to prepare Trading Account, Profit and Lo…Preview
  11. Q11Find odd one. (a) Building (b) Machinery (c) Furniture (d) Bills payable.Preview
  12. Q12Find the odd one: (a) General Reserve (b) Creditors (c) Investments (d) CapitalPreview
  13. Q13Current account always shows a debit balance. (a) Agree (b) DisagreePreview
  14. Q14In the absence of an agreement, interest on loan advanced by the partner to the firm is allowed at the rate of ______. (a) 5% (b) 6% (c) 10%…Preview
  15. Q15Write the word/phrase/term, which can substitute the following sentence. Partnership agreement in written form.Preview
  16. Q16Mama and Kaka are partners in partnership firm sharing profits and losses equally. You are required to prepare Profit and Loss Account for t…Preview
  17. Q17Trading Account is prepared on the basis of ______ expenses.Preview
  18. Q18Find the odd one: (a) Wages account (b) Salary account (c) Royalty account (d) Import duty accountPreview
  19. Q19Find the odd one: (a) Machinery account (b) Furniture account (c) Computer account (d) Rent accountPreview
  20. Q20Find the odd one: (a) General reserve account (b) Creditors account (c) Machinery account (d) Capital accountPreview
  21. Q21Partnership Firm is a trading concern. (a) Agree (b) DisagreePreview
  22. Q22Rajan and Rohit are partners in partnership firm sharing profits and losses equally. You are required to prepare Profit and Loss Account for…Preview
  23. Q23Complete the table: Cost of goods sold = Opening Stock + Purchases − .........Preview
  24. Q24Complete the table: | Sales | Purchases | Gross Profit | | --- | --- | --- | | ........ | 1,80,000 | 20,000 |Preview
  25. Q25Write the word/phrase/term, which can substitute the following sentence. Partnership agreement in written form.Preview
  26. Q26Expenses which are paid before due date are called as _____.Preview
  27. Q27Snehal and Deepali are partners sharing profits and losses in their capital ratio. Following is the Trial Balance as on 31st March 2021: | T…Preview
  28. Q28Answer the following question in only 'one' sentence: What is balance sheet?Preview
  29. Q29Write a word / term / phrase as a substitute for the following statement: The partner who neither brings capital nor participates in day to…Preview
  30. Q30State whether the following statement is True or False: Credit balance of profit and loss A/c shows net profit. (a) True (b) FalsePreview
  31. Q31Q. 7. From the following Trial Balance and Adjustments given below, you are required to prepare Trading and Profit and Loss Account for the…Preview

More questions

+Show 4 questions4 questions
  1. Q8Mr. X, a partner, withdrew ₹2,000 at the beginning of each month throughout the year for personal use. Calculate the interest on his drawing…Free
  2. Q9A and B are partners sharing profits and losses in the ratio 3:2. From the following Trial Balance and additional information, prepare the T…Free
  3. Q10For the firm of A and B in the previous problem (profit-sharing ratio 3:2), prepare the Balance Sheet as at 31st March 2024, and Partners' C…Preview
  4. Q11Using the same information for the firm of A and B as in the previous two problems, prepare Partners' Capital Accounts under the Fluctuating…Preview