Question : Assertion (A) Rent due to a partner is not transferred to the rent payable account but rather to the credit of the partner's capital account. Reason (R): Paying rent to a partner for allowing the company to utilise his personal property for commercial purposes is a transaction unrelated to that partner's status as a partner. As a result, the Rent Payable Account receives credit.
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 and 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.
Correct Answer: Assertion (A) is false but Reason (R) is true.
Solution : Rent payable to partner is the external liability of the firm not the appropriation. Thus it is credited to rent payable account. only appropriations are transferred to partners capital account. Thus assertion is false. and reason is true
Hence the correct answer is option 4.
Question : Assertion (A): A partner's salary is deducted from the profit and loss account.
Reason (R): A partner's salary is a appropriation of profit.
Question : Assertion (A): Rent paid to a partner is transferred to the debit of the profit and loss account but not to the debit of the profit and loss appropriation account. Reason (R): Rent paid to a partner is a cost that is deducted from profits rather than being appropriated
Question : Assertion (A): A new business is likely to have lesser goodwill. Reason (R): Goodwill is an intangible asset.
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.
Question : Assertion (A) : Profit and Loss Appropriation account shows the correct profit earned by the firm.
Reason (R) : The net Profit adjusted after takin into account the interest on capital, Interest on drawings, Salaries/ Commission Paid
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