Question : In the event of a change in the profit-sharing ratio, the General Reserve existing in the Balance Sheet is transferred to the Capital Accounts of partners in their
Option 1: sacrificing ratio
Option 2: gaining ratio
Option 3: old profit-sharing ratio
Option 4: new profit-sharing ratio
Correct Answer: old profit-sharing ratio
Solution : Answer = old profit-sharing ratio
If at the time of change in profit sharing ratio, reserve, accumulated profit and losses exist in the books of the firm, they are transferred to the partner's capital account on their old profit sharing ratio because reserve and accumulated profit and losses as on the date of change in profit sharing ratio were earned before the reconstitution of the firm. Hence, the correct option is 3.
Question : When goodwill existing in the books is written off at the time of admission of a partner it is transferred to Partners' Capital Accounts in their
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At the time of retirement of a partner, profit (gain) on revaluation will be credited to the Capital Accounts of
Question : When a new partner is admitted the balance of 'General Reserve' appearing in the Balance Sheet at the time of admission is credited to
Question : R, S and T are partners. Before changing their profit-sharing ratio to 5:3:2, they were sharing profit equally. Workmen's compensation reserve exited at Rs 1,00,000 against which a claim existed at Rs 20,000. The total amount that will be credited to their capital accounts
Question : The firm of P, Q and R with profit sharing ratio of 3: 6:1, h.ad the balance in General Reserve Account amounting Rs. 90,000. S joined as a new partner and the new profit sharing ratio was decided to be 3 : 3 : 3 : 1. Partners decide to keep the General Reserve unchanged
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