Change In Profit Sharing Ratio Of Existing Partners CBSE Questions & Answers

Change In Profit Sharing Ratio Of Existing Partners

This is Accountancy Class 12 Change in Profit sharing ratio of existing Partners CBSE Questions & Answers. There are 15 questions in this test with each question having around four answer choices.

Questions & Answers

1
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:
  • A
    Amount of compensation = Values of firm goodwill x share of profit gained
  • B
    Amount of compensation = Values of firm goodwill x share of profit sacrificed
    Correct
  • C
    Amount of compensation = Values of firm goodwill x share of loss sacrificed
  • D
    None
2
The reserves and accumulated profit and losses are transferred to Partner’s capital account in their _____ ratio
  • A
    Old
    Correct
  • B
    New
  • C
    Sacrificing
  • D
    Gaining
3
When there is a change in the profit sharing ratio, the entry pass to make adjustment for goodwill is in case for Fixed capital :
  • A
    Option A
  • B
    Option B
  • C
    Option C
  • D
    Option D
    Correct
4
______ is a kind of reserve created for payment of compensation in case of accident.
  • A
    Work compensation Reserve
  • B
    Investment compensation Reserve
  • C
    Profit and loss compensation Reserve
  • D
    Workmen’s compensation Reserve
    Correct
5
Investment Fluctuation Reserve is one kind of reserve created for adjustment of
  • A
    Book value and Factor value of investment
  • B
    Book value and market value of investment
    Correct
  • C
    Factor value and market value of investment
  • D
    Book None of these
6
For calculating the Proportional Amount of Net Effect of Revaluation for Sacrificing Partner is
  • A
    Sacrificing Partner = Share Gained x Net Effect of Revaluation
  • B
    Sacrificing Partner = Share Sacrificed x Net Effect of Revaluation
    Correct
  • C
    Gaining Partner = Share Sacrificed x Net Effect of Revaluation
  • D
    Sacrificing Partner = Share Sacrificed x Gross Effect of Revaluation
7
When partners decide to record the net effect of revaluation of assets and liabilities, a single adjusting entry involving the ____________ of gaining partners’ and sacrificing partner is passed
  • A
    Balance sheet
  • B
    Revaluation account
  • C
    Profit and /loss account
  • D
    Capital Account
    Correct
8
________ the ratio in which the partners share all the accumulated profits, reserves, losses and fictitious assets in case of change in profit sharing ratio
  • A
    Old Ratio
    Correct
  • B
    New Ratio
  • C
    Gaining Ratio
  • D
    Sacrificing Ratio
9
Which of the following item is not debited to the partners capital account?
  • A
    Drawings
  • B
    Advertisement suspense
  • C
    Loss on revaluation
  • D
    General Reserve
    Correct
10
___________on the reconstitution of partnership is necessary because their present value may be different from their book value
  • A
    Reassessment of assets
  • B
    Assessment of assets
  • C
    Revaluation of assets
    Correct
  • D
    Valuation of assets
11
Why do existing partners change their profit sharing ratio:
  • A
    Due active participation in management by a partner
  • B
    Due to change in capital contribution
  • C
    None of these
  • D
    Both
    Correct
12
In case of change in profit sharing ratio among the existing partners who will compensate the existing partners:
  • A
    Only one partner
  • B
    Sacrificing partner shall compensate
  • C
    All Partner’s shall compensate
  • D
    Gaining partner shall compensate
    Correct
13
Why it is necessary to revaluate
  • A
    Both
  • B
    Realizable value Assets and liabilities may be differ from those shown in the balance sheet
    Correct
  • C
    None
  • D
    Realizable value of Assets and liabilities always similar with those shown in the balance sheet
14
The significance of calculating sacrificing ratio:
  • A
    To determine the amount of compensation to be paid by sacrificing partner
  • B
    To determine the amount of compensation to be paid by gaining partner
    Correct
  • C
    To determine the amount of compensation to be paid by all partner
  • D
    To determine the amount of compensation to be paid by new partner
15
L, M and N are sharing profits and losses in the ratio of 5:3:2. If they all decide to share equally. Then who will sacrifice his share
  • A
    C
  • B
    A
    Correct
  • C
    B
  • D
    No one will sacrifice