1. Adjustments to Partners' Capital are
passed through current accounts when the capitals are fluctuating. (False)
2. Interest on capital of partner is
debited to Profit and Loss A/c (True)
3. Interest on drawings is an income to
the partnership firm. (True)
4. Capital account always shows a
credit balance. (False)
5. In the absence of an agreement to
the contrary, partners share profits in proportion to their capitals. (False)
6. Prepaid expenses is a liability. (False)
7. Balance sheet is a statement showing
financial position of the concern on a particular date. (True)
8. Income earned but not received is a
liability. (False)
9. Partners are entitled to salary. (False)
10. Every adjustment has to be recorded
at two places. (True)
11. Closing stock is to be valued at
cost or market price whichever is more. (False)
12. Partnership is a non – trading concern.
(False)
13. Balance Sheet is an account of
business result. (False)
14. Bad debts appearing in the Trial Balance
are reduced from the amount of Sundry Debtors in the Balance Sheet. (False)
