Question : Assertion (A): A Profit and Loss Appropriation Account is prepared to show the distribution of profits among partners as per the provision of Partnership Deed.
Reason (R): Only working partner(s) can inspect the books of accounts.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is false
Option 4: Assertion (A) is false but Reason (R) is true

Question

Question : Assertion (A): A Profit and Loss Appropriation Account is prepared to show the distribution of profits among partners as per the provision of Partnership Deed.
Reason (R): Only working partner(s) can inspect the books of accounts.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is false

Option 4: Assertion (A) is false but Reason (R) is true

Team Careers360 · Accepted Answer

Correct Answer: Assertion (A) is true but Reason (R) is false

Solution : A Profit and Loss Appropriation Account is prepared to show the distribution of profits among partners as per the provision of the Partnership Deed. Any partner whether working or non-working partner(s) can inspect the books of accounts. Hence, the correct option is 3.

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Related Questions

Question : Assertion (A): A profit and loss appropriation account is prepared to show how profits are distributed among partners in accordance with the Partnership Deed. Reason (R): Only the working partner(s) have access to the books of accounts.

Question : Assertion (A): A partnership deed may contain clauses that differ from those found in the Partnership Act of 1932, and in such cases, the provisions of the partnership deed take priority. Reason (R): When partners cannot come to an agreement on a topic, the Partnership

Question : Assertion (A): Dissolution of Partnership results in no change in the economic relationship. Reason (R): Dissolution of Partnership firm results in the ending of the economic relationship.

Question : Assertion (A): A partner's interest on capital is paid only from profits. Reason (R): Interest on capital is a profit appropriation that must be provided regardless of profit or loss.

Question : Assertion (A): Any firm that earns normal profits or is incurring losses has no goodwill. Reason (R): Goodwill is the value of the reputation of a firm in respect of the profits expected in future over and above the normal profits.

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Question : Assertion (A): A profit and loss appropriation account is prepared to show how profits are distributed among partners in accordance with the Partnership Deed.

Reason (R): Only the working partner(s) have access to the books of accounts.

Question : Assertion (A): A partnership deed may contain clauses that differ from those found in the Partnership Act of 1932, and in such cases, the provisions of the partnership deed take priority.

Reason (R): When partners cannot come to an agreement on a topic, the Partnership

Question : Assertion (A): Dissolution of Partnership results in no change in the economic relationship.
Reason (R): Dissolution of Partnership firm results in the ending of the economic relationship.

Question : Assertion (A): A partner's interest on capital is paid only from profits.
Reason (R): Interest on capital is a profit appropriation that must be provided regardless of profit or loss.

Question : Assertion (A): Any firm that earns normal profits or is incurring losses has no goodwill.
Reason (R): Goodwill is the value of the reputation of a firm in respect of the profits expected in future over and above the normal profits.