MARKING SCHEME: According to sec. 14 of the Indian Partnership Act, 1932, 1. the term 'Partnership' is "the relation between two or more persons who have agreed to share the profits of a business carried on by all or by any of them acting for all." Partnership Deed: 2. 'Partnership Deed' is a written document which contains the terms and conditions of Partnership agreed upon by all the partners. 3. P & L A/c includes all charges against profits whereas P & L Appropriation A/c includes all appropriations of profits. 4. In the absence of partnership deed, following rules will be applied for governing the partnership:- (1) Profit sharing ratio will be equal among all partners. (2) No interest will be given on partners’ capitals (3) No interest will be charged on partners’ drawings (4) No partner will be entitled to any salary, fees, commission or remuneration. Interest @ 6% p.a. is to be allowed on Advances/Loans (5) from partners.. 5. Following are the differences between Fixed capital method and Fluctuating capital method. Basis Fixed capital method Fluctuating capital method. 1.No.of Each partner has two Each partner has Accounts accounts, capital and only one account, current account. capital account. 2.Change The capital account The balance of in balance remains unchanged capital account unless there is an keeps on changing addition to or from time to time. withdrawal of capital. 3.Negative The fixed capital The fluctuating balance account of a partner capital account of a can never show a partner can show a negative balance. negative balance.
MARKING SCHEME: 1. According to sec. 14 of the Indian Partnership Act, 1932, the term 'Partnership' is "the relation between two or more persons who have agreed to share the profits of a business carried on by all or by any of them acting for all." 2. Partnership Deed: 'Partnership Deed' is a written document which contains the terms and conditions of Partnership agreed upon by all the partners. 3. P & L A/c includes all charges against profits whereas P & L Appropriation A/c includes all appropriations of profits. 4. In the absence of partnership deed, following rules will be applied for governing the partnership:- (1) Profit sharing ratio will be equal among all partners. (2) No interest will be given on partners’ capitals (3) No interest will be charged on partners’ drawings (4) No partner will be entitled to any salary, fees, commission or remuneration. (5) Interest @ 6% p.a. is to be allowed on Advances/Loans from partners.. 5. Following are the differences between Fixed capital method and Fluctuating capital method. Basis Fixed capital method Fluctuating capital method. 1.No.of Accounts Each partner has two accounts, capital and current account. Each partner has only one account, capital account. 2.Change in balance The capital account remains unchanged unless there is an addition to or withdrawal of capital. The balance of capital account keeps on changing from time to time. 3.Negative balance The fixed capital account of a partner can never show a negative balance. The fluctuating capital account of a partner can show a negative balance.
accountancy-xii.docx