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Question
Select the most appropriate alternative from those given below and rewrite the statement.
A partner who provides only capital to the firm is called as__________________.
Options
active
nominal
sleeping
minor
Solution
A partner who provides only capital to the firm is called as sleeping partner.
Explanation: A partner who just provides capital to the firm and does not take active part in day-to-day functioning of the business is a sleeping partner. But he is liable to the third parties for the dues of the firm.
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RELATED QUESTIONS
What is ‘liability of partners’ ?
Gupta and Sharma were partners in a firm. They wanted to admit five more members in the firm. List any two categories of individuals other than minors who cannot be admitted by them.
Under which major headings and sub-heading will the following items be placed in the Balance Sheet of a company as per Schedule VI part I of the Companies Act, 1956 :
(1) Loans provided re-payable on demand.
(2) Goodwill
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(4) General Reserve
(5) Cheques
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Under which major sub-headings the following items will be placed in the Balance Sheet of a company as per revised Schedule-VI, Part-I of the Companies Act, 1956:
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ii. Bonds
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Answer in one sentence only.
When is partner’s current account opened?
Give the word / term or phrase which can substitute the following statement.
A partnership agreement between the partners in written form.
Give the word / term or phrase which can substitute the following statement.
A partner who is engaged in day to day activities of the business.
Give the word / term or phrase which can substitute the following statement.
An amount contributed by the partners into the business.
Give the word / term or phrase which can substitute the following statement.
A partner who contributes only capital for the business but does not take any active part.
Give the word / term or phrase which can substitute the following statement.
A partner below the age of 18 years.
Give the word / term or phrase which can substitute the following statement.
To close the business of partnership firm.
Select the most appropriate alternative from those given below and rewrite the statement.
A debit balance of partner’s current account will appear on the ___________ side of the Balance Sheet.
Select the most appropriate alternative from those given below and rewrite the statement.
The Indian Partnership Act is in force since ____________
Select the most appropriate alternative from those given below and rewrite the statement.
Under fixed capital method, capital account and __________________ account is opened for each partner.
Select the most appropriate alternative from those given below and rewrite the statement.
Under fixed capital method, salary or commission to partner is credited to _______________ account.
Select the most appropriate alternative from those given below and rewrite the statement.
Partnership is an association of__________________ or more persons.
Select the most appropriate alternative from those given below and rewrite the statement.
The drawings of partners are transferred to __________________ account.
Select the most appropriate alternative from those given below and rewrite the statement.
If dates of drawings are not given, interest on drawings is charged for __________________ months.
State whether the following statement are True or False.
Partners must share profits and losses equally.
State whether the following statement are True or False.
The interest on drawings is an income of the partnership firm.
State whether the following statement are True or False.
An interest on capital is an expenditure of the partnership firm.
State whether the following statement are True or False.
Partners are entitled to get salary or commission.
Distinguish between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership Firm’ based on:
- Settlement of assets and liabilities
- Economic relationship
Assertion: Batman, a partner in a firm with four partners has advanced a loan of ₹ 50,000 to the firm for last six months of the financial year without any agreement. He claims an interest on loan of ₹ 3,000 despite the firm being in loss for the year.
Reasoning: In the absence of any agreement/provision in the partnership deed, provisions of Indian Partnership Act, 1932 would apply.
