12th Class Accountancy Change in Profit Sharing Ratio Among Existing Partner Question Bank

done Assertion and Reason - Change in Profit-Sharing Ratio Among Existing Partners Total Questions - 3

• question_answer1)

  Assertion (A) :

  Reconstitution of a firm always lead to change in profit-sharing ratio among the partners.

  Reason (R) :

  The main purpose of Reconstitution is to find Sacrificing Ratio or Gain Ratio.

  Choose the Correct Option from the following :

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of assertion. done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion. done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct. done clear
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• question_answer2)

  Assertion (A) :

  Change in profit sharing ratio among the existing partners leads to dissolution of partnership as the existing agreement comes to an end and the firm continues under new agreement.

  Reason (R) :

  Reconstitution of partnership will bring change in economic/business relationship among the partners. Business will continue and books of accounts of the firm not to be closed.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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• question_answer3)

  Assertion (A) :

  At the time of reconstitution of partnership firm, goodwill is not recognized in the books of accounts of the firm because consideration in money or money's worth is not paid for it.

  Reason (R) :

  Goodwill can be calculated by using average profit method, super profit method or capitalization method. After that an adjustment entry is passed for goodwill share, by debiting the gainer partner's capital/current account and by crediting the sacrificing partner's capital/current account.

  Choose the Correct Option from the following:

  A)
  Assertion and Reason both are correct and Reason is the correct explanation of assertion done clear
  B)
  Assertion and Reason both are correct but Reason is not correct explanation of assertion done clear
  C)
  Both Assertion and Reason are not correct done clear
  D)
  Only Assertion is correct done clear
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