Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Partnership

Question:

Amrita & Sikha started business on 1st April,2020 from property owned by Amrita. It was agreed that she will be paid rent @ ₹9,000 per month from 1st April,2021. At the time of preparing of accounts of partnership firm for the year ended 31st March,2022, Amrita demanded that rent should be provided for the year ended 31st March,2022, but Sikha did not agree. Who is correct and if Amrita is correct then how much amount is given?

Options:

Amrita is correct, ₹1,00,000

Sikha is correct

Amrita is correct, ₹1,20,000

None of these

Correct Answer:

None of these

Explanation:

The correct answer is option 4- None of these.

Amrita is correct because it is agreed between them that rent will be given from 1st April,2021 but amount is wrong.
Correct amount will be (9,000 x12) = ₹1,08,000.
So, the correct answer is none of these.

Rent is credited to rent payable account and it is charge against profit so debited to profit and loss account.