| Read the following hypothetical text and answer the given questions: |
| Bhavya and Naman were partners in a firm carrying on a tiffin service in Hyderabad Bhavya noticed that a lot of food is left at the end of the day. To avoid wastage, she suggested that it can be distributed to the needy; Naman wanted that it should be mixed with the food being served the next day. Naman then give a proposal that if his share in the profit increased, he will not mind free distribution of left over food Bhavya happily agreed So, they decided to change their profit sharing ratio 1:2 with immediate effect. On that date revaluation of assets and reassessment of liabilities was carried out that resulted into a gain of Rs. 18,000. On that date the goodwill of the firm was valued at Rs. 1,20,000. |
| Based on the above information you are required to answer the following questions: |
| At the time of change in profit sharing ratio, gaining partner capital account is ............ and sacrificing partner is ............ for adjustment of goodwill. |
A) credited, debited
B) debited, credited
C) increased, decreased
D) decreased, increased
Correct Answer: B
Solution :
[b] debited, credited
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