Change in Profit sharing ratio of Partners Test

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Change in Profit sharing ratio of Partners Test - 9

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Weekly Quiz Competition

Question 1
1 / -0

Where will you record the net affect of revaluation account when capitals of the partners are fixed?

A
Partners Current Accounts

B
Partners Capital Accounts

C
Profit and Loss Account

D
Balance Sheet only

Solution

When capitals of the partners are fixed all concerned items shall be recorded in their current accounts and not in capital accounts.
Question 2
1 / -0

Suman and Poonam were partners in a firm sharing profits in the ratio of 3:2. From 1st March 2015 they decided to change it to the 3:1. Find out the gainer partner and sacrificing partner?

A
No one is gainer

B
Poonam is gainer

C
Both partners are gainer

D
Suman is gainer

Solution

Calculation of Gain and sacrifice:
Suman = 3/5 – 3/4 = -3/15 Gain
Poonam = 2/5 – 1/4 = 3/15 Sacrifice
Sumain’s capital account will be debited and Poonam’s capital account will be debited for adjustment.
Question 3
1 / -0

Anita, Asha and Amrit are partners sharing profits in the ratio of 3:2:1. Form 1 April, 2015 they decided to share future profits in the ratio of 2:3:1. Identify the partner who is not a gainer and not sacrificing.

A
Amrit

B
Both Anita and Asha

C
Asha

D
Anita

Solution

Calculation of sacrifice and gain:
Anita = 3/6 – 2/6 = 1/6 Sacrifice
Asha = 2/6 – 2/6 = Gain
Amrit = 1/6 – 1/6 = No sacrifice/No gain
Question 4
1 / -0

Decrease in the value of all the assets on reconstitution of the firm result into :

A
No effect on the existing partners

B
Loss to the existing partners

C
Gain to the existing partners

D
Both Loss to the existing partners and Gain to the existing partners

Solution

Decrease in the value of all assets will be recorded in the debit side or revaluation account which will result into a loss. This loss will be debited to all the existing partners’ capital/current accounts in their profit sharing ratio.
Question 5
1 / -0

X, Y and Z are partners sharing profits equally. General reserve given in the balance sheet Rs.15,000. Now they have decided to distribute profits in the ratio of 6:3:1. With what amount gainer will be debited for general reserve in an adjustment entry?

A
X’s Capital A/c Dr.4,000

B
Loss of X is gain of Z

C
Y’s Capital A/c Dr.4,000

D
Z’s Capital A/c Dr.4,000

Solution

Adjustment for the amount of reserve:
X = 1/3 – 6/10 = 8/30 Gain
Y = 1/3 – 3/10 = 1/30 Sacrifice
Z = 1/3 – 1/10 = 7/30 Sacrifice

X gain 15000 × 8/30 = 4000
Question 6
1 / -0

Creditors given in the balance sheet Rs.40,000. It is given in the adjustment that one creditor of Rs.8,000 was settled at Rs.5,000. What amount of creditors is to be shown in the new balance sheet?

A
37,000

B
45,000

C
35,000

D
32,000

Solution

New value of creditors Rs.32,000 is to be shown in the new balance sheet of the firm. Creditors = 40,000 – 8,000 = 32,000 In Revaluation Account show Rs.3,000.
Question 7
1 / -0

Goodwill can be sold only when:

A
At the time of Merger

B
Business earning profits

C
New partner is admited

D
Entire business is sold

Solution

Goodwill is an intangible asset and can be sold like other assets only when entire business is sold. It cannot be sold separately like other assets i.e. furniture, machine and motor vehicle etc.
Question 8
1 / -0

Goodwill is recorded in the books only when:

A
Money or money worth is paid for it

B
Goodwill is self generated

C
It is sold

D
A partner retires

Solution

Goodwill is recorded in the books of accounts only when some money or money’s worth is paid for it. It means only purchased goodwill is recorded in the books and self generated goodwill is just a part of calculation, which is not shown in the balance sheet of a business firm.
Question 9
1 / -0

Total Assets (excluding goodwill) – outside liabilities will be:

A
Super Profit

B
Fictitious Assets

C
Capital employed

D
Average Profits

Solution

Formula: Total Assets – outside liabilities, is used to find out the value of capital employed. Capital employed is that part of the capital which is active in the business at present. Calculation of capital employed is necessary to find out the goodwill while following super profit method.

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Re-Attempt Weekly Quiz Competition

Change in Profit sharing ratio of Partners Test - 9

Result

Change in Profit sharing ratio of Partners Test - 9

Score

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Rank

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SHARING IS CARING

Question 1

Partners Current Accounts

Partners Capital Accounts

Profit and Loss Account

Balance Sheet only

Solution

Question 2

No one is gainer

Poonam is gainer

Both partners are gainer

Suman is gainer

Solution

Question 3

Amrit

Both Anita and Asha

Asha

Anita

Solution

Question 4

No effect on the existing partners

Loss to the existing partners

Gain to the existing partners

Both Loss to the existing partners and Gain to the existing partners

Solution

Question 5

X’s Capital A/c Dr.4,000

Loss of X is gain of Z

Y’s Capital A/c Dr.4,000

Z’s Capital A/c Dr.4,000

Solution

Question 6

37,000

45,000

35,000

32,000

Solution

Question 7

At the time of Merger

Business earning profits

New partner is admited

Entire business is sold

Solution

Question 8

Money or money worth is paid for it

Goodwill is self generated

It is sold

A partner retires

Solution

Question 9

Super Profit

Fictitious Assets

Capital employed

Average Profits

Solution

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