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CA Foundation Indian Partnership Act 1932 — practice questions

Explore 7 free Indian Partnership Act 1932 questions in CA Foundation Accountancy. Open each question or exercise to read its content, reference answers and available explanation.

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Indian Partnership Act 1932 questions and exercises with answers

Showing questions 1–7 of 7.

Under the Indian Partnership Act 1932, partnership is defined under which section?Read the answer and worked solution →Maximum number of partners in a partnership firm under the Companies Act 2013 (as amended) isRead the answer and worked solution →If the partnership deed is silent on profit-sharing, profits will be shared inRead the answer and worked solution →Where the partnership deed is silent, interest on partner's loan to the firm is allowed atRead the answer and worked solution →If the deed is silent, interest on capital isRead the answer and worked solution →A new partner without consent of existing partners can be admittedRead the answer and worked solution →Partnership Deed essentially containsRead the answer and worked solution →

Worked practice questions

Under the Indian Partnership Act 1932, partnership is defined under which section?

  1. Section 2
  2. Section 4
  3. Section 12
  4. Section 17
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Correct answer: B. Section 4

1. Section 4 of the Indian Partnership Act 1932 defines partnership. 2. It describes the relation between persons sharing profits of a business carried on by all or any acting for all. 3. Sections 12 and 17 deal with conduct of business and rights when no contract exists. 4. Hence the definition lies in Section 4. _Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 1 "Introduction to Partnership and Partnership Final Accounts", §1.1 ¶§1.1_

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Maximum number of partners in a partnership firm under the Companies Act 2013 (as amended) is

  1. 50
  2. 20
  3. 10
  4. 100
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Correct answer: A. 50

1. The Indian Partnership Act 1932 itself does not cap partner count. 2. The Companies Act 2013 (amended 2014) limits a partnership to 50 partners. 3. Beyond that, an association becomes an unlawful association. 4. Hence the maximum is 50. _Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 1 "Introduction to Partnership and Partnership Final Accounts", §1.1 ¶§1.1_

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If the partnership deed is silent on profit-sharing, profits will be shared in

  1. Capital ratio
  2. Equal ratio
  3. Time ratio
  4. Drawings ratio
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Correct answer: B. Equal ratio

1. Section 13 of the Partnership Act controls the default. 2. When the deed is silent, profits and losses are shared equally regardless of capital or time. 3. Capital and time-ratio rules apply only if the deed expressly says so. 4. Hence the default is equal ratio. _Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 1 "Introduction to Partnership and Partnership Final Accounts", §1.2 ¶§1.2_

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More Accountancy topics

Partnership AccountsIntroduction to Accounting & Recording TransactionsAccounting for Partnership Firms: Retirement and Death of a PartnerCompany AccountsAnalysis of Financial StatementsReconstitution AdmissionBills of ExchangeTrial Balance and Rectification of Errors