Test: New Profit Sharing and Sacrificing Ratio- Assertion & Reason Type Questions


8 Questions MCQ Test Accountancy Class 12 | Test: New Profit Sharing and Sacrificing Ratio- Assertion & Reason Type Questions


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Attempt Test: New Profit Sharing and Sacrificing Ratio- Assertion & Reason Type Questions | 8 questions in 16 minutes | Mock test for Commerce preparation | Free important questions MCQ to study Accountancy Class 12 for Commerce Exam | Download free PDF with solutions
QUESTION: 1

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): When the profit sharing ratio changes, all the reserves are transferred to the Profit and Loss Appropriation Account.

Reason (R): The reserves are transferred in the old profit sharing ratio.

Solution: When the profit sharing ratio changes all the reserves are transferred to the Profit and Loss Appropriation Account in the old profit sharing ratio, so that the accumulated profits can be distributed among the partners for the restructuring of the firm.
QUESTION: 2

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Ram and Rahim share profits in the ratio 2:3. They decide to change the profit sharing ratio and share the profits equally. Ram is the gaining partner.

Reason (R): Ratio of Ram is 1/10.

Solution: Ram is the gaining partner as his share of profit is increasing from 2th/5 to 1/2
QUESTION: 3

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): The gaining partner transfers the amount of goodwill to the sacrificing partners in proportion.

Reason (R): The gaining ratio is the share of profit gained by a partner when there is a change in the profit sharing ratio.

Solution: The gaining partner transfers the amount of goodwill to the sacrificing partners in proportion in order to compensate for the sacrificed goodwill as per the gaining ratio.
QUESTION: 4

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): At the time of change in profit sharing ratio, it is important to determine the sacrificing ratio and gaining ratio of partners.

Reason (R): The gaining partners compensate the sacrificing partners by paying them an appropriate amount of goodwill.

Solution: At the time of change in profit sharing ratio, it is important to determine the sacrificing ratio and gaining ratio of partners, as the gaining partners need to compensate the sacrificing partners.
QUESTION: 5

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): When a new partner is admitted it results in the restructuring of the firm.

Reason (R): When a new partner is added it leads to the change in profit sharing ratio.

Solution: Admission is called restructuring of the firm as it leads to not only change in profit sharing ratio but also the change in the partnership deed.
QUESTION: 6

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Restructuring of the firm leads to the change in the profit sharing ratio.

Reason (R): A change in the profit sharing ratio among the existing partners results in a gain of additional share in the future profit for some partners while a loss of a part thereof for other partners.

Solution: Restructuring of the firm is when there is admission, retirement, death or even just change in the profit sharing ratio.
QUESTION: 7

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Norsang and Nyomit share profit and loss in the ratio of 1:2. They decide to change the profit sharing ratio to 2:3. The goodwill of the firm stood at ₹60,000. Norsang gave ₹2,000 to Nyomit as the share of goodwill.

Reason (R): If the partners decide to change their profit sharing ratio, the gaining partner must compensate the sacrificing partner by way of payment to him as goodwill in the gaining ratio.

Solution: If the partners decide to leave them undisturbed it is necessary to make an adjustment entry in the books of the firm. In that case, the share gained by the gaining partner, he must compensate the sacrificing partner that share of profits and reserves which is proportionate to him.
QUESTION: 8

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Dissolution of the partnership firm is also called restructuring of the partnership.

Reason (R): Restructuring of the firm leads to the change in profit sharing ratio and adjustment of goodwill.

Solution: Dissolution of the partnership firm is also called the end of the partnership.
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