Sarthaks Test
0 votes
in Accounts by (64.1k points)

Following differences have arisen among P, Q and R. State who is correct in each case: a. P used Rs.20,000 belonging to the firm and made a profit of Rs.5,000. Q and R want the amount to given to the firm? b. Q used Rs.5,000 belonging to the firm and suffered a loss of Rs.1,000. He wants the firm to bear the loss c. P and Q want to purchase goods from A Ltd., R does not agree? d. Q and R want to admit C as partner, P does not agree?

1 Answer

+1 vote
by (106k points)
selected by
Best answer

a. P is bound to pay Rs.20,000 along with profit of Rs.5,000 to the firm because this amount belongs to the firm. 

Explanation: According to the principal and agent relationship, P is principal as well as agent to the firm and to Q and R. As per the rule, any profit earned by an agent (P) by using the firm’s property is attributable to the firm. 

b. Q is liable to pay Rs.5,000 to the firm. According to the Partnership Act, every partner of a partnership firm is liable to the firm for any loss caused by his/her wilful negligence. 

Explanation: Here, Q is solely responsible for the loss of Rs.1,000 because he used the property of the firm and also represented himself as a principal rather than an agent to the other partners and to the firm. 

c. P and Q may buy goods from A Ltd. 

Explanation: According to the Partnership Act, a partner has a right to buy and sell goods without consulting the other partners unless a Public Notice has been given by the partnership firm to restrict the partners to buy and sell. 

d. C will not be admitted because one of the partners, P, has not agreed to admit C. Explanation: According to the Partnership Act, a new partner cannot be admitted into a firm unless all the existing partners agree on the same decision. In other words, a new partner can be admitted in a partnership firm with the consent of all the existing partners.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.