AP Inter 1st Year Commerce Answer Key 2026 (OUT) LIVE: Paper Difficulty Level Analysis; Solved Questions
The AP Inter 1st Year Commerce exam 2026 was held on March 12, from 9 AM to 12 PM. It was a 72-mark paper with 1, 2, 4, and 8 mark questions, and no negative marking. Find the AP Inter 1st Year Commerce Answer Key 2026 and paper analysis here.
AP Inter 1st Year Commerce Exam 2026 LIVE:The AP Inter 1st Year Commerce exam 2026 was successfully held onMarch 12, 2026, from 9 AM to 12 PM. As per the paper pattern, the candidates will get 1 mark, 2 marks, 4 marks, and 8 marks questions in the AP Inter 1st Year Commerce exam. Total weightage of the paper was 72 marks, and the candidates got 3 hours to answer the paper. Business Finance, Emerging Trends in Business, Sole Proprietorship, and Joint Hindu Family Business were the high-weightage chapters, from which the candidates will get around 21 marks. The AP Inter 1st Year Commerce answer key has been shared below.
AP Inter 1st Year Commerce Answer Key 2026
The answer key of AP Inter 1st Year Commerce exam 2026 is provided below:Q. No. | Question | Answer |
Section A, 1 | Economic Activities refer to the activities involved with... | Production and consumption of goods and services for earning money. |
Section A, 2 | ... Hindu Law prevails in Assam and West Bengal. | Dayabhaga |
Section A, 3 | ... is the Constitution of the Company. | Memorandum of Association (MoA) |
Section A, 4 | Funds required to purchase fixed assets in a business are called... | Fixed Capital |
Section B, 5 | Employment | An economic activity where people work for others in exchange for remuneration (salary/wages). |
Section B, 6 | Trade | The process of buying and selling goods and services with the objective of earning profit. |
Section B, 7 | Partnership firm | A business structure where two or more persons agree to share the profits of a business carried on by all or any of them acting for all. |
Section B, 8 | Sleeping Partner | A partner who contributes capital and shares profits/losses but does not take an active part in the daily management of the business. |
Section B, 9 | Cooperative Society | A voluntary association of persons joined together with the motive of welfare of the members and providing service. |
Section B, 10 | Karta | The eldest male member (or senior-most member) who manages and controls the affairs of a Joint Hindu Family Business. |
Section B, 11 | Minimum Subscription | The minimum amount of capital (usually 90%) that must be raised by a public company via a prospectus before it can allot shares. |
Section B, 12 | Government Company | A company in which at least 51% of the paid-up share capital is held by the Central or State Government. |
Section B, 13 | E-trading | The buying and selling of financial securities (like shares) or goods through electronic platforms and the internet. |
Section B, 14 | Working Capital | The capital required for the day-to-day operations of a business (calculated as Current Assets - Current Liabilities). |
Section E, 24 | AICPA means... | American Institute of Certified Public Accountants. |
Section E, 25 | L.F. means... | Ledger Folio (The page number of the ledger where the entry is posted). |
Section E, 26 | ... is the 8th subsidiary book. | Journal Proper (Used for entries that don't fit in other books). |
Section E, 27 | Final Statements... | Trading A/c, P&L A/c, and Balance Sheet. |
Section F, 28 | Define Accounting | The process of identifying, measuring, recording, and communicating financial information to users. |
Section F, 29 | Double Entry System | A system where every transaction has a dual effect: a Debit and a corresponding Credit. |
Section F, 30 | Trade Discount | A reduction in the list price allowed by a seller to a buyer; it is not recorded in the books of accounts. |
Section F, 31 | Debit Note | A document sent to a supplier when goods are returned, indicating their account is being debited. |
Section F, 32 | Opening Entry | An entry made at the start of a year to bring forward balances of Assets, Liabilities, and Capital from the previous year. |
Section F, 33 | Contra Entry | A transaction involving both Cash and Bank accounts, recorded on both sides of a three-column cash book. |
Section F, 35 | Overdraft | A bank facility allowing a customer to withdraw more than their available balance (a current liability). |
Section F, 36 | Bad Debts | The portion of a debt owed by a customer that is deemed uncollectible and written off as a loss. |
Section F, 37 | Drawings | Cash or goods taken by the proprietor from the business for personal use. |
AP Inter 1st Year Commerce Exam 2026: Major Highlights
Find out the major highlights related to the AP Inter 1st Year Commerce exam 2026 here in the following table:
Particulars | Details |
AP Inter 1st Year Commerce Exam 2026 date | March 12, 2026 |
Exam time | 9 AM to 12 PM |
Marks distribution | 1 mark, 2 marks, 4 marks and 8 marks |
High weightage chapters |
|
Section-wise total marks |
|
Total marks | 72 marks |
Time duration | 3 hours |
Negative marking | No negative marking is there for the incorrect answers |
Candidates will get the AP Inter 1st Year Commerce unofficial answer key, along with the students’ feedback, here, after 12 PM.
Also read lAP Inter Result Date 2026 Prediction
AP Inter 1st Year Commerce Exam 2026 LIVE
Mar 12, 2026 03:50 PM IST
Answer key released
AP Inter 1st Year Commerce answer key 2026 has been released. Students can cross-verify the answers with their respective responses and get an idea about their exam performance.
Mar 12, 2026 12:35 PM IST
Answer key soon
AP Inter 1st Year Commerce answer key 2026 will be shared here soon. The exam ended at 12 PM sharp, and the solved question paper will be made available here shortly.
Mar 12, 2026 12:00 PM IST
AP Inter 1st Year Commerce exam 2026 ends
AP Inter 1st Year Commerce exam ends. Soon, the students will leave the exam centres. Our team will connect them and collect their feedback then.
Mar 12, 2026 11:00 AM IST
Will there be any negative marking in AP Inter 1st Year Commerce exam 2026?
No, there will be no negative marking for the incorrect answers.
Mar 12, 2026 10:00 AM IST
AP Inter 1st Year Commerce 2026 Exam: When will result be released?
As per the previous years' trends, it is assumed that the AP Inter 1st year result 2026 will likely be released by April 16, 2026.
Mar 12, 2026 09:00 AM IST
AP Inter 1st Year Commerce 2026 Exam Starts
APInter 1st Year Commerce exam 2026 has been started, which will end at 12 PM. Post that the unofficial answer keys along with the students' feedback will be added here.
Mar 12, 2026 08:00 AM IST
What is Reporting Time for AP Inter 1st Year Commerce 2026?
As per the previous exams of AP Inter 1st year, the gates of the exam centres will be opened in next 15 minutes. Candidates can enter inside the exam hall since 8.15 AM. The gate will be closed at 8.45 AM. Post that noone will be allowed to enter inside the exam hall.
Mar 12, 2026 07:00 AM IST
AP Inter 1st Year Commerce 2026: Prohibited Items
- Calculators
- Mobile phones or electronic gadgets
- Whitener
Mar 12, 2026 05:00 AM IST
What are the top four distinction questions?
MOA vs. AOA (Charter vs. Internal Rules).
Private Company vs. Public Company.
Equity Shares vs. Preference Shares.
Sole Proprietorship vs. Partnership.
Mar 12, 2026 04:00 AM IST
AP Intr 1st Year Commerce Exam 2026: Final Exam Hall Tips
- Use a black ballpoint pen for side headings and a blue pen for writing the answers
- Try to answer every 4-marks and 8-marks questions on a fresh page
- Always use a pencil and scale for drawing answers. It is necessary to keep your copy neat and clean
Mar 12, 2026 03:00 AM IST
What are the types of Preference Shares
- Non-cumulative Preference Shares
- Non-participating Preference Shares
- Non-convertible Preference Shares
- Irredeemable Preference Shares
- Non-cumulative Preference Shares
- Redeemable Preference Shares
Mar 12, 2026 02:00 AM IST
What are the major limitations of raising funds through equity shares?
- Equity shares get fluctuating returns; hence, the investors (who want steady income) may not choose this
- The cost of equity shares is generally higher than the cost of raising the funds
- While raising funds, there are plenty of legal formalities and procedural delays involved
Mar 12, 2026 01:00 AM IST
What are the major benefits of raising funds through issuing the equity shares?
- Equity shares do not create any obligations for paying a fixed rate of dividend.
- Without creating any charge over the assets of the company, the equity shares can be issued
- Equity shares are the permanent source of capital, and the companies do not need to repay them except under liquidation
- Equity shareholders are the real company owners, who have the power to vote
Mar 12, 2026 12:00 AM IST
What are the Short Term Sources of Finance?
- Bank Credit
- Trade Credit
- Installment Credit
- Advances
- Commercial Papers
Mar 11, 2026 11:00 PM IST
What are the Medium Term Sources of Finance?
1. Public Deposits
2. Loans from Banks
3. Lease Financing
Mar 11, 2026 10:00 PM IST
What are the Long Term Sources of Finance?
- Equity Shares
- Retained Earnings
- Preference Shares
- Debentures
Mar 11, 2026 09:30 PM IST
Classification of Non - Institutional Sources of Finance
1. Long-term sources (above 5 years)
2. Medium-term sources (above 1 year and below)
3. Short-term sources (below one year)
Mar 11, 2026 09:00 PM IST
Classification of Sources of Finance
- Non-Institutional Sources of Finance
- Institutional Sources of Finance
- International Sources of Finance
Mar 11, 2026 08:40 PM IST
List of Short Answer Type Questions on Basic of Business Finance
- Explain the classification of sources of finance.
- What are the various types of capital required for business enterprises?
Mar 11, 2026 08:20 PM IST
List of Essay Type Questions on Basics of Business Finance
- What are the various factors that determine the selection of sources of finance?
- What is business finance? Explain its need and significance in business organizations.
Mar 11, 2026 08:00 PM IST
What are the Key Factors Determining the Choice of Sources of Finances
- Cost
- Form of organisation and legal status
- Financial strength and stability of operations
- Purpose and time period
- Control
- Risk profile
- Flexibility and ease vvv
- Effect on creditworthiness
- Tax benefits
Mar 11, 2026 07:40 PM IST
List of Short Answer Questions on Joint Stock Company
- What are the different types of promoters?
- Explain the functions of promoters.
- What is the liability for misstatement in a prospectus?
- Discuss the differences between the Memorandum of Association and the Articles of Association.
- What documents are required to obtain a certificate of Commencement of Business?
Mar 11, 2026 07:20 PM IST
List of Essay Questions on Formation of a Joint Stock Company
- Describe various steps involved in promoting a company.
- What is Memorandum of Association? Explain its clauses.
- What is a prospectus? Explain the contents of the prospectus.
- Discuss the procedure to form a company.
- Describe various steps involved in promoting a company
Mar 11, 2026 07:00 PM IST
Differences between Memorandum of Association and Articles of Association (1/2)
Basis of Distinction MOA AOA Provisions It is subordinate only to the Act It is subordinate to the Organizational Act and memorandum Alteration It cannot be changed easily It can be altered easily Legal Effects Any act beyond the scope of the memorandum will be void Any act beyond the scope of the articles will not be void Mar 11, 2026 06:40 PM IST
Differences between Memorandum of Association and Articles of Association (1/1)
Basis of Distinction MOA AOA Nature It is the Constitution of the company It contains the rules for internal management Scope It defines the objects and powers of the organization It defines the rules for carrying out the internal objects Relationship Company and Outsiders Company and its Members Mar 11, 2026 06:20 PM IST
List of Documents to be prepared for formation of a company
- Memorandum of Association
- Articles of Association
- Prospectus
Mar 11, 2026 06:00 PM IST
AP Inter 1st Year Commerce Exam 2026: Types of Promoters
- Professional Promoters
- Financial Promoters
- Institutional Promoters
- Accidental Promoters
- Technical Promoters
Mar 11, 2026 05:40 PM IST
Formation of a Joint Stock Company: What are the Stages of Promotion?
- Discovery of an Idea
- Detailed Investigation
- Assembling the Requirements
- Financing Proposition
Mar 11, 2026 05:20 PM IST
What are the steps of company formation?
- Promotion
- Incorporation or Registration
- Capital Subscription
- Commencement of Business
Mar 11, 2026 05:00 PM IST
List of Essay Type Questions on Joint Stock Company
- Explain the advantages and disadvantages of a joint stock company.
- List out and briefly explain different types of companies.
- What is a joint stock company? What are the features of it?
- Distinguish between a private company and a public company
Mar 11, 2026 04:40 PM IST
Distinction Between Private Company and Public Company (1/2)
Particulars Private Company Public Company Board of Directors - Minimum: Two
- Maximum: No limit
- Minimum: Three
- Maximum: 20 directors
Commencement of business Private company can start its business immediately upon the incoreporation It cannot start the business immediately after the incorporation. It has to obtain a certificate for starting Mar 11, 2026 04:20 PM IST
Distinction Between Private Company and Public Company (1/1)
Particulars Private Company Public Company Minimum number of members 2 members 7 members Maximum number of members 200 members No limit Minimum paid-up capital 1 lakh 5 lakh Mar 11, 2026 04:00 PM IST
List of Essay Type Questions on Partnership
- Is registration of Partnership compulsory under the Partnership Act, 1932? Explain the procedure required for registration of a firm.
- What is Partnership Deed and explain its contents.
- Define Partnership. Discuss its merits and limitations.
- Discuss different types of Partners.
- Explain the rights and duties of partners.
Mar 11, 2026 03:40 PM IST
List of Essay Type Questions on Joint Hindu Family Business
- A cooperative form of organisation is a method of ‘Self Help’ – Discuss.
- Discuss the merits and demerits of coopeative form of organization
- What is Joint Hindu Family Business? Discuss its main features
- Define the Cooperative Society. Explain its features
- State the advantages and disadvantages of the Hindu undivided family business organization
Mar 11, 2026 03:20 PM IST
What are the Types of Cooperative Societies?
- Consumers’ Cooperative Societies
- Marketing Cooperative Societies
- Farming Cooperative Societies
- Producer’s Cooperative Societies
- Housing Cooperative Societies
- Credit Cooperative Societies
Mar 11, 2026 03:02 PM IST
AP Inter 1st Year Commerce 2026 Exam Day Checklist
- Candidates should carry the hall ticket of the AP Inter 1st year exam in a transparent folder. It is advised to keep a photocopy of the hall ticket at home.
- Bring at least two blue pens and one black pen
- An eraser and a sharpener
- A long scale and a sharpened pencil
- Carry your own College ID card
- An analog watch
Mar 11, 2026 03:00 PM IST
What are the features of Cooperative Organisation?
- Service Motive
- Distribution of Surpluson Capital Investment
- Open Membership
- State Control
- Democratic Set Up
- Return on Capital Investment
- Voluntary Association
- Number of Members
- Capital
Mar 11, 2026 02:45 PM IST
List of Short Answer Type Questions of Sole Proprietorship
- What is meant by Business Organisation?
- Why sole trading is a better Business Organisation?
- What is sole proprietorship?
- Explain the limitations of Sole trader
Mar 11, 2026 02:30 PM IST
List of Essay Type Questions of Sole Proprietorship
- “One man management is best in the world provided one man is big enough totake care of everything”. Discuss.
- Define Sole Proprietorship and discuss its merits and demerits.
- Explain the features of sole Proprietorship.
Mar 11, 2026 02:15 PM IST
What are the features of sole proprietorship?
- Single ownership
- Unlimited Liability
- No separate entity
- No distinction between Ownership and Management
- One-man control
- No sharing of profit and loss
- Less legal formalities
Mar 11, 2026 02:00 PM IST
List of Short Answer Type Questions on Business Activities
- What do you understand by Commerce?
- State the Types of Foreign Trade.
- How Foreign Trade is classified?
- Why Communication is required as an Aid to Trade?
- Why warehousing is needed?
- Explain the Classification of Industries.
Mar 11, 2026 01:45 PM IST
List of Essay Type Questions on Business Activities
- What is meant by industry? Explain various types of industries with suitableexamples.
- Define Trade and explain the various types of aids to trade.
- Narrate the importance of Commerce.
- Explain the hindrances involved in Commerce.
- What is Commerce? Describe the various branches of Commerce.
Mar 11, 2026 01:30 PM IST
Key Comparison between Industry, Trade and Commerce (1/3)
Feature Industry Trade Commerce Elements - Extractive
- Construction
- Genetic
- Manufacturing
- Trade
- Aids to trade
- Home trade
- Foreign trade
Ownership and Control By industrialists By merchants By traders Mar 11, 2026 01:15 PM IST
Key Comparison between Industry, Trade and Commerce (1/2)
Feature Industry Trade Commerce Risk High risk (production/machinery) Risk of price fluctuations Risk involved in transit/storage Place Conducted in factories/farms Conducted in markets/shops Conducted through various agencies Mar 11, 2026 01:00 PM IST
Key Comparison between Industry, Trade and Commerce (1/1)
Feature Industry Trade Commerce Focus Production of goods Sale and purchase Distribution of goods Capital Requires huge fixed capital Requires more working capital Requires moderate capital Mar 11, 2026 12:45 PM IST
AP Inter 1st Year Commerce Exam 2026: Types of Partners
Based on the extent of Participation:
- ‘Active Partners’ or ‘Working Partners’
- Sleeping Partners
Based on Sharing of Profits:
- Nominal Partners
- Partners in Profits
Based on Liability:
- Limited Partners
- General Partners
Based on the Behaviour and Conduct Exhibited:
- Partner by Estoppel
- Partner by Holding out
Mar 11, 2026 12:30 PM IST
The "Must-Do" 4-Mark Questions
- Sole Proprietorship: Features, merits, and demerits.
- Joint Hindu Family Business: Role of Karta and features.
- Types of Entrepreneurs: Innovative, Fabian, Drone, and Imitative.
- Equity Shares vs. Preference Shares: Differences in voting rights and dividends.
- Partnership Deed: What is it and what are its contents?
- E-Business: Benefits to the modern consumer.
- Wholesaler vs. Retailer: Differences in the chain of distribution.
Mar 11, 2026 12:15 PM IST
List of 8-Marks Questions
Functions of Commercial Banks: Master both Primary (Deposits/Loans) and Secondary (Agency/Utility) functions.
SEBI Functions: Protective, Regulatory, and Developmental functions.
Money Market vs. Capital Market: A comparison based on duration, instruments, and risk.
Principles of Insurance: Explain at least 7 principles (Utmost Good Faith, Insurable Interest, Indemnity, etc.).
Mar 11, 2026 12:00 PM IST
What are the processes of registration of Partnership?
- To apply to the Registrar of Firms, the candidates should do it in the prescribed form
- Candidates should fill out the details like the following in the registration form and then send it to the Registrar of firms. The form should be accompanied by a fee of Rs 3.
- The name of the firm
- Location of the firm
- Names of other places where the firm carries on business
- The name in full and the addresses of the partners
- The date on which various partners joined the firm
- The duration of the firm
- The duly formed document must be signed by all the partners
Mar 11, 2026 11:45 AM IST
Practice Questions on Fundamental Aspects of Joint Stock Company (1/3)
Ques. The 'Common Seal' of a company serves as its:
Answer. Physical Signature
Ques. Which type of company prohibits any invitation to the public to subscribe for its securities?
Answer. Private Limited Company
Ques. The Board of Directors is elected by the shareholders to fulfill which role?
Answer. To manage and control the affairs of the company
Mar 11, 2026 11:30 AM IST
Practice Questions on Fundamental Aspects of Joint Stock Company (1/2)
Ques. What is the minimum number of members required to form a 'Public Limited Company'?
Answer. 7
Ques. The liability of a shareholder in a Joint Stock Company is generally:
Answer. Limited to the face value of the shares held
Ques. Which document acts as the 'Charter' of the company and defines its external powers and objects?
Answer. Memorandum of Association
Mar 11, 2026 11:15 AM IST
Practice Questions on Fundamental Aspects of Joint Stock Company (1/1)
Ques. Which Act currently governs the formation and regulation of Joint Stock Companies in India?
Answer. The Companies Act, 2013
Ques. A Joint Stock Company is often defined as an 'Artificial Person.' What does this mean?
Answer. It exists only in the eyes of the law and can own property and sue others
Ques. What is meant by the 'Perpetual Succession' of a company?
Answer. The company continues to exist despite changes in membership
Mar 11, 2026 11:00 AM IST
What are the classification of companies?
- Chartered Companies
- Statutory Company
- Registered Company
- Government Company
- One Person Company
Mar 11, 2026 10:45 AM IST
Which Factors Determine the Choice of Sources of Finances
- Cost
- Financial strength and stability of operations
- Form of organisation and legal status
- Purpose and time period
- Risk profile
- Control
- Effect on creditworthiness
- Flexibility and ease
- Tax benefits
Mar 11, 2026 10:30 AM IST
Important "2-Mark" Terms (VSAQs) on Emerging Trends in Business
- Smart card, which is a plastic card with a built-in microprocessor, is used only for financial transactions.
- ATM, which is an Automated Teller Machine, allows consumers to perform banking transactions like cash withdrawal 24/7.
- Knowledge Process Outsourcing (KPO) is the outsourcing of high-end, knowledge-based tasks which are required for technical skills.
- E-Commerce, which is the process of buying and selling goods and services over the internet
Mar 11, 2026 10:15 AM IST
Important Practice Questions on Emerging Trends in Business (1/3)
Ques. What is a 'Digital Wallet' primarily used for in the emerging trends of business?
Answer. Making electronic payments and storing funds for future use.
Ques. One of the social benefits of E-Business is that it:
Answer. Reduces traffic and environmental pollution by minimizing the need for travel.
Ques. In the emerging business context, what does an 'OTP' (One Time Password) provide?
Answer. Enhanced security for electronic transactions.
Mar 11, 2026 10:00 AM IST
Important Practice Questions on Emerging Trends in Business (1/2)
Ques. In the outsourcing industry, how does Knowledge Process Outsourcing (KPO) differ from Business Process Outsourcing (BPO)?
Answer. KPO involves high-end expertise and information work, while BPO is for routine processes.
Ques. Which payment method is most commonly associated with a mobile-based instant transfer system in India?
Answer. UPI
Ques. A consumer selling a second-hand item to another person on an online platform like OLX is an example of which E-Business category?
Answer. Consumer to consumer
Mar 11, 2026 09:45 AM IST
Important Practice Questions on Emerging Trends in Business (1/1)
Ques. In the context of emerging business trends, what is the primary scope of 'E-Business' compared to 'E-Commerce'?
Answer. E-Business includes E-Commerce along with internal business processes.
Ques. A business firm interacting with its own employees electronically for training or payroll is an example of which E-Business relationship?
Answer. Intra-B Commerce
Ques. Why do many modern companies choose to 'Outsource' their non-core activities like payroll or customer support?
Answer. To focus on core competencies and improve efficiency
Mar 11, 2026 09:30 AM IST
Final Strategy for Business Finance
- To answer any difference between questions, candidates should use tables. Do not write it in paragraphs.
- To answer the "Sources of Finance" question, the candidates should draw a quick tree diagram.
Mar 11, 2026 09:15 AM IST
"Gunshot" 2-Mark Definitions for Business Finance
Candidates should not lose their marks to answer the following technical terms:
- Venture Capital
- Lease Financing
- Bridge Finance
- ICD (Inter-Corporate Deposits)
Mar 11, 2026 09:00 AM IST
The "Big Three" Long Answer Topics for Business Finance
- Equity Shares vs. Preference Shares
- Retained Earnings (Ploughing back of profits)
- Role of SEBI
Mar 11, 2026 08:45 AM IST
"Expert Tips" and High-Yield Structures for Business Finance (1/2)
The "Sources of Finance" Hierarchy
- By Ownership:
- Owner's Funds: Equity Shares, Retained Earnings (No fixed obligation to pay).
- Borrowed Funds: Debentures, Loans, Public Deposits (Mandatory interest payment).
- By Period:
Long-term: Shares, Debentures, Financial Institutions (IFCI, ICICI).
Short-term: Trade Credit, Bank Overdraft, Commercial Papers.
- By Ownership:
Mar 11, 2026 08:30 AM IST
"Expert Tips" and High-Yield Structures for Business Finance (1/1)
Master the "Fixed vs. Working Capital"
- Fixed Capital: Fund for the long-term assets, such as Machinery and Land.
- Determinants: Nature of business (Manufacturing needs more than Trading), Scale of operations, Technology used.
- Working Capital: Fund is required for day-to-day operations (Salaries, Raw materials)
- Determinants: Length of operating cycle, Credit policy, Seasonal factors.
- Fixed Capital: Fund for the long-term assets, such as Machinery and Land.
Mar 11, 2026 08:15 AM IST
AP Inter 1st Year Commerce Exam 2026: Business Finance Practice Questions (1/1)
Ques. Which type of capital is required for purchasing fixed assets like land, buildings, and machinery?
Ans. Fixed Capital
Ques. The capital raised through the issue of shares is known as:
Ans. Ownership Capital
Ques. What happens to the 'Working Capital' requirement if a business has a very long production cycle?
Ans. It increases
Ques. The 'Money Market' deals with financial instruments that have a maturity period of:
Ans. Up to one year
Mar 11, 2026 08:00 AM IST
AP Inter 1st Year Commerce Exam 2026: Partnership Practice Questions (1/3)
Question. In the event of a partner's retirement, the 'Revaluation Account' is prepared to:
Answer. Find the profit ot loss on the change in value of assets and liabilities.
Question. Registration of a partnership firm in Andhra Pradesh is:
Answer. Optional/ Voluntary
Mar 11, 2026 07:45 AM IST
AP Inter 1st Year Commerce Exam 2026: Partnership Practice Questions (1/2)
Question. If the Partnership Deed is silent on the profit-sharing ratio, how should profits be distributed among partners?
Answer. Equally
Question. What type of partner does not contribute capital or participate in management but allows the firm to use their name?
Answer. Nominal Partner
Question. A minor can be admitted to a partnership only for:
Answer. The benefits of partnership
Mar 11, 2026 07:30 AM IST
AP Inter 1st Year Commerce Exam 2026: Partnership Practice Questions (1/1)
Question. According to the Indian Partnership Act, 1932, what is the 'true test' of a partnership?
Answer. Mutual Agency
Question. What is the maximum number of partners allowed in a firm as per the Companies Act, 2013?
Answer. 50
Question: The written document containing the terms and conditions of a partnership is known as:
Answer. Partnership Deed
Mar 11, 2026 07:15 AM IST
AP Inter 1st Year Commerce Exam 2026: Types of Partners
- Active partner
- Sleeping (Dormant) Partner, that means it contributes capital and shares profit; however, they cannot participate in management
- Nominal Partner; only lends their names to the firm. However, they don't contribute capital or share profits, but are liable to the outsiders
- Minor partners (who are under 18 years) are admitted only for the benefit of the business
Mar 11, 2026 07:00 AM IST
Pros and Cons of Partnerships
Pros Cons No complex legal registration is required Personal assets are at risk for firm debts Larger capital; more partners mean more funding is required compared to sole trading Business may end if a partner dies or retires Losses are divided among all partners Differences in opinion lead to conflicts Mar 11, 2026 06:45 AM IST
AP Inter 1st Year Commerce Exam 2026: Essential Features of Partnerships
- Partnership is always made by an agreement between the partners. The document is called the Partnership Deed.
- There must be at least 2 people. As per the Companies Act, the maximum limit of the partnership is 50.
- The partnership must be carried out as a legal business with the intention of earning a profit
- Partners should agree to share profits and losses in an agreed ratio. If no ratio is mentioned, then the share will be equal
Mar 11, 2026 06:30 AM IST
Pro Tips for Answering 4 Marks Questions
Here is the writing format of the 4-mark questions:
- Introduction: One line for defining the term
- Body: Use 5 bulleted side headings. It is wise to bold the headings
- Diagram: Use a simple "Star" or "Flowchart" for showing the features
Mar 11, 2026 06:15 AM IST
Sole Proprietorship Practice Questions: Very Short Answer Type
- What is "Unlimited Liability"?
Define a "Sole Trader."
Why is "Secrecy" an advantage in sole proprietorship?
Mar 11, 2026 06:00 AM IST
Sole Proprietorship Practice Questions: Short Answer Type
- Define Sole Proprietorship and explain its key features.
- Discuss the advantages (merits) of a Sole Trading business.
- What are the limitations (disadvantages) of a sole proprietorship?
Mar 11, 2026 05:45 AM IST
Quick Comparison between Sole Proprietorship and Joint Hindu Family Business
Particulars Sole Proprietorship JHF Business Membership Only 1 At least 2 (Male/Female) Liability Unlimited Karta: Unlimited; Others: Limited Act/Law No specific Act Hindu Law / Succession Act Control Sole Proprietor Karta Mar 11, 2026 05:30 AM IST
AP Inter 1st Year Commerce Exam 2026: Essential Features of Joint Hindu Family Business
- JHF is created by the birth status in the family, not by agreement or contract
- The eldest family member takes ownership of handling the business, and hence, he has unlimited liability
- If the other family members have an equal share in the property, they will have limited liability for their share
- After the death of the karta, the next eldest member will take over the business
- A person will become a member by birth, so that a minor person can also be a part of the business
Mar 11, 2026 05:15 AM IST
AP Inter 1st Year Commerce Exam 2026: Merits and Demerits of Sole Proprietorship
Advantages Disadvantages Quick Decision Making Limited Resources Business secrets are kept safe by the owner Personal assets are at risk 100% profits will be added to the owner Limited managerial skill since one person is not enough to be an expert in all the fields Ease of Formation Business depends solely on the owner's death Mar 11, 2026 05:00 AM IST
AP Inter 1st Year Commerce Exam 2026: Essential Features of Sole Proprietorship
For answering the 4-mark short notes, the candidates are advised to include the following essential features.
- Single ownership: The individual will provide all the capital and own the assets of the business.
- Unlimited Liability: If the business fails, then the owner's personal property will be sold to pay off the business debt.
- Lack of Business Continuity: The death, insolvency, or illness of the owner leads to the end of the business.
- Individual Risk Bearing: The sole trader is the sole beneficiary and sole sufferer of losses if the business incurs profits or suffers losses, respectively.
- No Separate Legal Entity: As per the law, the owner and business are the same.