Question 1

Branch Trading &Profit & Loss A/c is only a _________ account not forming part of the full accounting system.
A)single
B)memorandum
C)capital
D)double

Accepted Answer

Branch Trading & Profit & Loss A/c is considered a memorandum account, which means it is used for internal purposes and does not form part of the double-entry accounting system.

Question 2

In final account system, Branch Trading and Profit & Loss A/c is prepared at ________
A)invoice price
B)cost price
C)cost & invoice price
D)market price

Accepted Answer

Branch Trading and Profit & Loss Account can be prepared at both cost price and invoice price, depending on the accounting policy of the business.

Question 3

Under Final A/c system, the profit or loss made by the branch is determined by preparing
A)branch stock a/c
B)branch debtors a/c
C)branch adjustment a/c
D)branch trading & profit &loss a/c

Accepted Answer

The profit or loss made by a branch is determined by preparing the Branch Trading and Profit & Loss Account, which shows the branch's trading results, including its revenues, expenses, profits, or losses.

Question 4

The Branch Account prepared under Final Account System is the nature of:
A)nominal account
B)real account
C)personal account
D)general account

Accepted Answer

The Branch Account prepared under Final Account System is a nominal account because it represents the profit or loss of the branch for a specific period of time.

Question 5

Dependent branch makes:
A)cash sales only
B)credit sales only
C)cash & credit sales
D)instalment sales

Accepted Answer

Dependent branches typically make both cash and credit sales as they operate under the control of the head office and follow its policies, which usually include both types of sales to maximize revenue.

Question 6

All branch expenses such as rent, salary are paid by H.O in case of:
A)independent branch
B)local branch
C)dependent branch
D)foreign branch

Accepted Answer

In the case of a dependent branch, all branch expenses such as rent, salary are typically paid by the Head Office (H.O) because dependent branches do not operate independently and rely on the head office for financial support and administrative decisions.

Question 7

Branch Trading & Profit & Loss A/c is prepared to incorporate all _____
A)revenue items
B)capital items
C)asset items
D)past items

Accepted Answer

Branch Trading & Profit & Loss Account is prepared to incorporate all revenue items, reflecting the branch's operational performance over a specific period.

Question 8

The difference between goods sent by H.O. and received by branch is known as _______
A)goods in transit
B)goods in warehouse
C)goods in production
D)goods in godown

Accepted Answer

Goods in transit refers to items that have been shipped by the seller (in this case, the head office, H.O.) but have not yet been received by the buyer (the branch). This term captures the period during which the goods are on their way from one location to another.

Question 9

The stock reserve for unrealised profit will be ________ to the H.O profit & Loss A/C
A)debited
B)credited
C)first credited then debited
D)not shown

Accepted Answer

The answer of The stock reserve for unrealised profit will...

Question 10

____________ account is prepared to adjust the loads included in the value of opening stock and closing stock.
A)branch stock
B)branch adjustment
C)stock reserve
D)branch p&l

Accepted Answer

Branch adjustment account is prepared to adjust the loads included in the value of opening stock and closing stock.

Question 11

____________ account shows the shortage or surplus of stock.
A)branch adjustment
B)branch stock
C)goods sent to branch
D)branch p&l

Accepted Answer

The branch stock account is used to track the inventory at a branch, showing any shortages or surpluses of stock by comparing the physical stock to the book records.

Question 12

The profit included in surplus or shortage of stock is transferred to ______ account
A)branch stock
B)branch expenses
C)branch adjustment
D)branch p&l

Accepted Answer

The profit included in surplus or shortage of stock is transferred to the branch adjustment account to reconcile any discrepancies in stock levels.

Question 13

The balance of branch adjustment account is transferred to _________ account
A)branch stock
B)branch p&l
C)branch debtors
D)branch expenses

Accepted Answer

The balance of the branch adjustment account is transferred to the branch profit and loss account. This is because the branch adjustment account is used to adjust the profits or losses of the branch, and thus its balance reflects the net result of these adjustments, which naturally belongs in the profit and loss account for the branch.

Question 14

An ordinary partnership business can have:
A)not more than 50 partners
B)not more than 20 partners.
C)any number of partners.
D)any number than 2 partners.

Accepted Answer

In many jurisdictions, an ordinary partnership business is limited to not more than 20 partners. This is to maintain the personal liability and management simplicity that characterizes ordinary partnerships.

Question 15

In the absence of an agreement profit and loss are divided by partners in the ratio of:
A)capital
B)equally
C)time devoted by each partners
D)none of these.

Accepted Answer

In the absence of an agreement, profits and losses are divided equally among partners according to the Uniform Partnership Act. This is a general rule applied to ensure fairness among partners when no specific terms have been established.

Question 16

In the absence of an agreement, Interest on loan advanced by the partner to the firm is allowed at the rate of:
A)6%
B)5%
C)12%
D)9%

Accepted Answer

In the absence of an agreement, interest on loan advanced by a partner to the firm is allowed at the rate of 6% per annum as per the provisions of the Indian Partnership Act, 1932.

Question 17

Current accounts of the partners should be opened when the capitals are:
A)fluctuating
B)fixed
C)either fixed or fluctuating
D)none of these

Accepted Answer

When the capitals are fixed, current accounts are opened to record the partners' drawings, interest, and share of profits or losses separately from the capital accounts.

Question 18

Investment in partnership is made by introducing:
A)cash
B)none - cash assets
C)cash or non - cash assets
D)none of these.

Accepted Answer

Investment in a partnership can be made by introducing either cash or non-cash assets (such as property, equipment, or intellectual property), depending on the agreement between the partners.

Question 19

Any partner who investments in the business but does not take active part in the business is:
A)secret partner
B)sleeping partner
C)active partner
D)nominal partner

Accepted Answer

A sleeping partner is someone who invests in a business but does not take part in its day-to-day operations or management.

Question 20

The written agreement of partnership is called:
A)partnership deed
B)articles of association
C)memorandum of association
D)certificate of incorporation

Accepted Answer

A partnership deed is the document that outlines the rights, responsibilities, and obligations of the partners in a partnership firm.

Quiz 4: Accounting for Branches and Partnerships

Branch Trading &Profit & Loss A/c is only a _________ account not forming part of the full accounting system.

In final account system, Branch Trading and Profit & Loss A/c is prepared at ________

Under Final A/c system, the profit or loss made by the branch is determined by preparing

The Branch Account prepared under Final Account System is the nature of:

Dependent branch makes:

All branch expenses such as rent, salary are paid by H.O in case of:

Branch Trading & Profit & Loss A/c is prepared to incorporate all _____

The difference between goods sent by H.O. and received by branch is known as _______

The stock reserve for unrealised profit will be ________ to the H.O profit & Loss A/C

____________ account is prepared to adjust the loads included in the value of opening stock and closing stock.

____________ account shows the shortage or surplus of stock.

The profit included in surplus or shortage of stock is transferred to ______ account

The balance of branch adjustment account is transferred to _________ account

An ordinary partnership business can have:

In the absence of an agreement profit and loss are divided by partners in the ratio of:

In the absence of an agreement, Interest on loan advanced by the partner to the firm is allowed at the rate of:

Current accounts of the partners should be opened when the capitals are:

Investment in partnership is made by introducing:

Any partner who investments in the business but does not take active part in the business is:

The written agreement of partnership is called: