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Mona and Tina were partners in a firm sharing profits in the ratio of 3 : 2. Naina was admitted with 1/6th share in the profits of the firm. At the time of admission, Workmen’s Compensation Reserve appeared in the Balance Sheet of the firm at ₹ 32,000. The claim on account of workmen’s compensation was determined at ₹ 40,000. Excess of claim over the reserve will be

Ans – b) Explanation:- If Worken Compensation Claim is more than the available Workmen Compensation Reserve. The excess will be debited to Revaluation Account.

Anurag Pathak
June 1, 2023

When a new partner is admitted, the balance of ‘General Reserve’ appearing in the Balance sheet at the time of admission is credited to

Ans – c) Explanation:- The General Reserve is part of the past profits earned by the old partners. Thus it belongs to old partners in the old profit-sharing ratio.

Anurag Pathak
June 1, 2023

Niyati and Aisha were partners in a firm sharing profits and losses in the ratio of 4 : 3. They admitted Bina as a new partner. Niyati sacrificed 1/4th from her share and Aisha sacrificed 1/7th from her share in favor of Bina. Bina’s share in the profits of the firm will be

Ans – b) solution:- Bina gets 1/4 from Niyati Bina gets 1/7 from Aisha Thus Bina’s share in profit 1/4 + 1/7 = 11/28

Anurag Pathak
June 1, 2023

A and B are partners sharing profits in the ratio of 2 : 3, they admit C as a partner for 1/4th share, the sacrificing ratio of A and B will be

Ans – a) Explanation:- In the absence of any further information. the sacrificing ratio of the old partners is always equal to the old ratio.

Anurag Pathak
June 1, 2023

When goodwill existing in the books is written off at the time of admission of a partner, it is transferred to partner’ Capital accounts in their

Ans – a) Explanation:- Existing Goodwill was purchased by old partners in the past. the it should be written of from the books in their old profit sharing ratio.

Anurag Pathak
June 1, 2023

Goodwill brought by the incoming partner is distributed among the old partners in their

Ans – c) Explanation:- Goodwill brought in by the incoming partner’s is distributed to old partners in their sacrificing ratio of compensate them.

Anurag Pathak
June 1, 2023

X and Y are partners sharing profits and losses in the ratio of 3 : 2. Z was admitted for the 1/5th share and for this he brings ₹ 1,50,000, as capital. If capitals are to be proportionate to profit sharing ratio, the respective capitals of the partners will be:

Ans – b) Solution:- Calculation of the new profit-sharing ratio Old Ratio = 3 : 2 Z admitted for 1/5th share Remaining Share = 1 – 1/5 = 4/5 X’s Share in new firm = 4/5 × 3//5 = 12/25…

Anurag Pathak
June 1, 2023

X and Y are partners sharing profits in the ratio of 3 : 2, and capitals as ₹ 1,00,000 and ₹ 50,000 respectively. Z is admitted for 1/5th share in profits. The amount Z will contribute as capital will be

Ans – C) Solution:- Combined adjusted capital of the old partners = ₹ 1,00,000 + ₹ 50,000 = ₹ 1,50,000 Combined Profit share of the old partners = 1 – 1/5 = 4/5 Total Capital of the firm = 1,50,000…

Anurag Pathak
June 1, 2023

When goodwill existing in the books is written off at the time of admission of a partner, it is transferred to Partner’s Capital Accounts in their.

Ans – a) Explanation:- Existing Goodwill was purchased before the admission of the new partner. Thus it must be written off in the old profit-sharing ratio at the time of admission of the new partner.

Anurag Pathak
June 1, 2023

X, Y and Z who are sharing profits and losses in the ratio of 5 : 3 : 2, decide to share future profits and losses in the ratio of 2 : 3 : 5 w.e.f. 1st April, 2023, after admission of A. An extract of the Balance Sheet as at 31st March 2023 is as follows:

Ans – i) – C, ii) – A Explanation:- (i) As it is the reduction in the book value of Plant and Machinery. The plant and machinery would be debited to Revaluation Account. (ii) Increase in creditors is debited to…

Anurag Pathak
June 1, 2023

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