D:-Increase in profit by Rs. 1,200
Correct Answer:- Option-A

Question28:-In the absence of any agreement partners are entitled to receive interest on loans and advances provided by
them at the rate of

A:-12% p.a.
-10% p.a.
C:-8% p.a.
D:-6% p.a.
Correct Answer:- Option-D

Question29:-K,L,M are partners sharing profits and losses in the ratio of 2:1:1. Firm has a joint life policy of
Rs. 1,20,000 and appears in the Balance Sheet at surrender value of Rs. 20,000. On the death of K, his share of joint life
policy account will be

A:-Rs. 10,000
B:-Rs. 50,000
C:-Rs. 60,000
D:-Rs. 1,20,000
Correct Answer:- Option-B
Question30:-The amount in the security premium account cannot be used for the purpose of
A:-Issue of fully paid bonus shares
B:-Writing off preliminary expenses
C:-Writing off commission or discount on issue
D:-Writing off losses of company
Correct Answer:- Option-D

Question31:-When shares are forfeited, share capital account is debited with and the share forfeiture account 5
credited with

A:-Paid up amount, called up amount
B:-Face value, calls in arrear

C:-Called up amount, amount received
D:-Amount received, calls in arrears
Correct Answer:- Option-C

Question32:-K Ltd. forfeited 150 shares of Rs. 10, issued at a premium of Rs. 2 for nonpayment of the final call of Rs. 3 out
of these 100 shares were reissued at Rs. 11 per share. How much would be transferred to capital reserve ?

A:-Rs. 700
B:-Rs. 450
C:-Rs. 1,050
D:-Rs. 800
Correct Answer:- Option-A
Question33:-A decrease in provision for bad and doubtful debts would result in
A:-Increase in liability
B:-Increase in net profit
C:-Decrease in net profit
D:-Decrease in liability
Correct Answer:- Option-B
Question34:-When a firm is dissolved, profit or loss on realization will be shared by the partners
A:-In profit sharing ratio
B:-In capital ratio
C:-Equally
D:-As per rule in Garner vs. Murray case
Correct Answer:- Option-A

Question35:-Z paid Rs. 40,000 as premium for goodwill at the time of admission on the condition that partnership will be for
10 years. But after 3 years the firm has dissolved due to misconduct of Y, another partner. Will Z entitled to refund any
amount paid by him towards goodwill

A:-Yes, Rs. 40,000
-Yes, Rs. 28,000
C:-Yes, Rs. 12,000
D:-Won't get anything
Correct Answer:- Option-B
Question36:-'Maximum loss method! is a term associated with
A:-Marine loss
B:-Depreciation