CA. (Dr.) G. S. GREWAL
Objective Type Question / MCQs
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Question Series 2
1. The ratio in which one or more partners of the firm forego i.e.,
sacrifice their share of profits in favour of one or more partners of the firm is called _______.
sacrifice their share of profits in favour of one or more partners of the firm is called _______.
2. Sudhir and Bhuwan are partners in firm sharing profits in the ratio of 3:2. They decided to share future profit equally. On the date of change in profit sharing ratio, Profit and Loss Account has a debit balance of Rs. 50,000. It will be adjusted in Partners Capital Accounts by passing the following Journal Entry:
Sudhir’s Capital A/c …Dr. 30,000
Bhuwan’s Capital A/c …Dr. 20,000
To Profit and Loss A/c 50,000.
Multiple Choice Questions
3. Gaining Ratio is calculated by deducting
(a) Sacrificed profit share from new profit share of the partner.
(b) Sacrificed profit share from old profit share of the partner.
(c) New profit share from old profit share of the partner.
(d) Old profit share from new profit share of the partner.
Answer – Question Series -2
Fill in the Blanks
1. * Sacrificing Ratio *True / False
2. * True *
Reason: Profit and Loss Account (Dr.) is shown on the Assets side of Balance Sheet and is an accumulated loss distributed among old partners in old profit sharing ratio.
Sudhir’s Share = 50,000 X 3/5 = Rs. 30,000
Bhuwan’s Share = Rs. 50,000 X 2/5 = Rs. 20,000.
Multiple Choice Questions
3. * d *
Reason: - Gaining ratio means increase in share. Thus, new profit share will be higher than the old profit share. Therefore, Gaining Ratio = New Ratio – Old Ratio.
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