ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers (Question 1 to 5)

ISC ACCOUNTS Interest On Capital MCQs with solved answers
ISC ACCOUNTS Interest On Capital MCQs with solved answers

1. Interest on capital is allowed when it is provided in the  :
(a) Partnership Deed
(b) Indian Partnership Act, 1932
(c) Company Act, 2013
(d) None of these

2. When additional capital is introduced and some capital is withdrawn permanently, the interest on capital will be calculated on the amount of the :

(a) Opening Capital 
(b) Capital used in the business during a particular period
(c) Closing Capital
(d) Average Capital

3. Interest on partner’s capital is an expense to the firm and hence debited to profit and loss appropriation A/c. On the other hand, it is an income for partners and hence credited to the :

(a) partner’s capital Account (Individually).
(b) partner’s current Account (Individually).
(c) a and b both
(d) Profit and Loss Account
4. Interest allowed on partner’s Capital what journal entry will be passed in the books of Firm.
(a) Interest on Capital A/c  Dr.
  To Partner’s Capital /current A/c (Individually)
  (Crediting ‘Interest on Capital’ to Partner’s  Capital/current A/c)
(b) Interest on Capital A/c  Dr.
To Profit and Loss  A/c (Individually)
(Crediting ‘Interest on Capital’ to Partner’s  Capital/current A/c)

(c) Profit and Loss Appropriation A/c Dr.
  To Interest on Capital A/c
  (Interest on capital transferred to Profit & Loss Appropriation A/c)
(d) None of these

5. Interest on partner’s Capital transfer to Profit and Loss Appropriation A/c what journal entry will be passed in the books of Firm.
(a) Interest on Capital A/c  Dr.
To Partner’s Capital /current A/c (Individually)
(Crediting ‘Interest on Capital’ to Partner’s  Capital/current A/c)
(b) Interest on Capital A/c  Dr.
To Profit and Loss  A/c (Individually)
(Interest on capital transferred to Profit & Loss Appropriation A/c)
(c) Profit and Loss Appropriation A/c Dr.
To Interest on Capital A/c
(Interest on capital transferred to Profit & Loss Appropriation A/c)
(d) All of the above

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers

Answer – Question Number 1 To 5 

1. Answer- (a) Partnership Deed

2. Answer- Capital used in the business during a particular period

3. Answer- (c) a and b both

4. Answer- (a) Interest on Capital A/c  Dr.
To Partner’s Capital /current A/c (Individually)
(Crediting ‘Interest on Capital’ to Partner’s  Capital/current A/c)

5. Answer- (c) Profit and Loss Appropriation A/c Dr.
To Interest on Capital A/c
(Interest on capital transferred to Profit & Loss Appropriation A/c)

ISC ACCOUNTS 12 Interest On Drawing MCQs with solved answers

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers (Question 6 to 10)

ISC ACCOUNTS Interest On Capital MCQs with solved answers
ISC ACCOUNTS Interest On Capital MCQs with solved answers

6. J and K started a partnership business on 1st April 2020. Their capital contributions were ₹1,80,000 and ₹1,20,000 respectively. The partnership deed provided Interest allowed on capitals @10% p.a. The books are closed on March 31, every year. The amount of interest on capital will be: 

(a) ₹18,000,₹12,000
(b) ₹9,000,₹6,000
(c) ₹15,000,₹15,000
(d) None of these

7. Shilpa and Sanju are partners with a capital of ₹ 2,00,000 and ₹ 1,00,000 on April 1, 2019 respectively. Shilpa introduced additional capital of ₹ 30,000 on September 30, 2019, and Sanju introduced additional capital of ₹ 20,000 on January 1, 2020. Calculate interest on capital for the year ending 31st March 2020. The rate of interest on capital is 9% p.a. The amount of interest on capital will be: 

(a) ₹19,350,₹12,000
(b) ₹9,450,₹19,350
(c) ₹19,350,₹9,450
(d) ₹18,000,₹9,000

8. Ajay and Shubham are partners in a firm with a capital of ₹ 4,00,000 and ₹ 3,00,000 on April 1, 2019, respectively.

Ajay introduced additional capital of ₹80,000 on June 1st, 2019 and Shubham introduced additional capital of ₹ 50,000 on September 30th,2019. Ajay withdraw ₹ 30,000 from his capital on January 1st, 2020.

Calculate interest on capital for the year ending 31st March 2020. The rate of interest on capital is 9% p.a. How much interest is allowed on Ajay Capital?

(a) ₹44,500
(b) ₹40,500
(c) ₹43,200
(d) ₹41,325

9. Anil is a partner in a firm with a capital of ₹ 4,00,000 on April 1st,2019. Anil introduced additional capital of ₹1,50,000 on June 1st,₹ 1,00,000 on September 30th, And ₹ 50,000  on January 1st, 2020 Anil withdraw ₹ 25,000 on August 1st  and ₹ 15,000 on December 1st from his capital 2019 Calculate interest on capital for the Year Ending 31st March 2020. The rate of interest on capital is 9% p.a.

 How much interest is allowed on Anil Capital?

(a) ₹50,500
(b) ₹50,525
(c) ₹50,925
(d) ₹50,325

10. Sajal and Varnit are partners in a firm sharing profits and losses in the ratio of 3:2 their capitals at the end of the financial year 2020 were ₹ 5,60,000 and ₹ 4,10,000 after debiting drawings and crediting Share of Profits respectively.

Their drawings during the year were₹75,000 and  ₹45,000 respectively.

Profit for the year ₹1,00,000. Calculate interest on capital for the Year Ending 31st March 2020. The rate of interest on capital is 10% p.a.How much interest is allowed on Sajal and Varnit Capital?

(a) ₹60,000,₹40,000
(b) ₹48,500,₹36,500
(c) ₹56,000,₹41,000
(d) ₹57,500,₹41,500

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers

Answer – Question Number 6 To 10

6. Answer- (a) ₹18,000,₹12,000

7. Answer- (c) ₹19,350,₹9,450

8. Answer- (d) ₹41,325

9. Answer- (c) ₹50,925

10. Answer- (d) ₹57,500,₹41,500

Note-Generally Interest on capital is calculated on opening capitals If opening capital is not given in the question or Closing capital is given in the question, it is necessary to calculate the opening capitals.

Opening Capital= Closing Capital+Drawing-Profit

 

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers (Question 11 to 15)

ISC ACCOUNTS Interest On Capital MCQs with solved answers
ISC ACCOUNTS Interest On Capital MCQs with solved answers

11. Vivek and Vikas are partners in a firm sharing profits and losses in the ratio of 4:1 . their capitals at the end of the financial year 2020 were ₹ 3,60,000 and ₹ 2,40,000 after debiting drawings and crediting Share of Profits respectively. Their drawings during the year were:₹40,000 and ₹ 60,000 respectively.

Profit for the year ₹1,25,000. Vivek introduced additional capital of ₹ 30,000 on September 30, 2019. Calculate interest on capital for the year ending 31st March 2020. The rate of interest on capital is 6% p.a. How much interest is allowed on  Vivek and Vikas Capital?

(a) ₹16,200,₹16,500
(b) ₹17,100₹16,500
(c) ₹18,100,₹16,500
(d) None of these

12. Vivek and Vikas are partners in firm sharing profits and losses in the ratio of 4:1 . their capitals at the end of the financial year 2020 were ₹ 3,60,000 and ₹ 2,40,000 after debiting drawings and crediting Share of Profits respectively. Their drawings during the year were:₹40,000 and ₹ 60,000 respectively.

Profit for the year ₹1,25,000. Vivek introduced additional capital of ₹ 30,000 on September 30, 2019. The amount of opening capital would be:

(a) ₹2,70,000,₹2,75,000
(b) ₹3,00,000₹2,75,000
(c) ₹4,00,000,₹3,00,000
(d) None of these

13. I, J and K were three partners sharing profits and losses in the ratio of 2:1:2. On 1st April 2020, their capital account balances stood at ₹ 90,000, ₹ 80,000, and ₹ 20,000 (Dr) respectively.
On this date, they admitted L into the partnership with a capital of ₹ 50,000. Naveen is to have 1/ 4 share of the profits with a guaranteed minimum share of distributable profits of ₹ 60,000.
The new profit-sharing ratio among the partners being I: J: K: L = 6:2:7:5.
The profit of the firm for the year 2020-21 was ₹ 2,60,000 before the following adjustments were made:
Interest on Capital @ 10% per annum to be allowed to the partners.
The total interest on capital allowed by the firm to the partners will be:
(a) ₹ 22,000
(b) ₹ 23,000
(c) ₹ 21,400
(d) ₹ 23,100

14. Vivek and Vikas are partners in a firm sharing profits and losses in the ratio of 3:2  with capitals  ₹ 2,00,000 and ₹ 1,00,000 respectively. Interest on capital @8%p.a. and the profits for the year are ₹ 18,000. Interest allowed on capital will be:

(a) ₹12,000,₹6,000
(b) ₹16,000₹8,000
(c) ₹9,000,₹9,000
(d) None of these

15. when the partnership agreement provides for treating interest on capital as a charge:

(a) Interest will be allowed in case of only profit
(b) Full Interest will be allowed whether there are profits or losses
(c) No interest will be allowed
(d) None of these

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers

Answer – Question Number 11 To 15

11. Answer- (b) ₹17,100₹16,500

12. Answer- (a) ₹2,70,000,₹2,75,000

13. Answer- (b) ₹ 22,000

14. Answer- (a) ₹12,000,₹6,000

15. Answer- (b) Full Interest will be allowed whether there are profits or losses

ISC ACCOUNTS 12 Interest On Capital MCQs with solved answers

ISC ACCOUNTS Interest On Capital MCQs with solved answers
ISC ACCOUNTS Interest On Capital MCQs with solved answers

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