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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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.
Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'B'. Can you explain this answer?
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Directions : In the following questions, a statement of Assertion (A)...
If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio through the Capital or Current Accounts as per the AS 26.
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Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.
Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.
Explanation:
To understand the relationship between the Assertion and Reason given in the question, let's break down each statement and analyze them individually.
Assertion (A): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.
- Goodwill is an intangible asset that represents the reputation, customer base, and other factors that contribute to the value of a business. When there is a change in the partnership, the old goodwill needs to be accounted for.
- When new partners join or old partners retire from a partnership, the existing goodwill needs to be adjusted. The old goodwill is written off among the old partners in the old ratio. This means that the value of the old goodwill is transferred to the capital accounts of the old partners based on their existing profit-sharing ratio.
Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.
- The reason states that the amount of goodwill should be adjusted through partners' capital/current accounts. This means that the adjustment should reflect in the capital accounts of the partners.
Explanation of the relationship between Assertion and Reason:
The Reason provides an explanation for the Assertion. When the old goodwill is written off among the old partners in the old ratio, it results in an adjustment in their capital accounts. This adjustment ensures that the value of the old goodwill is distributed among the partners based on their profit-sharing ratio.
Therefore, both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A). Option (b) is the correct answer.
Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.
Explanation:
To understand the relationship between the Assertion and Reason given in the question, let's break down each statement and analyze them individually.
Assertion (A): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.
- Goodwill is an intangible asset that represents the reputation, customer base, and other factors that contribute to the value of a business. When there is a change in the partnership, the old goodwill needs to be accounted for.
- When new partners join or old partners retire from a partnership, the existing goodwill needs to be adjusted. The old goodwill is written off among the old partners in the old ratio. This means that the value of the old goodwill is transferred to the capital accounts of the old partners based on their existing profit-sharing ratio.
Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.
- The reason states that the amount of goodwill should be adjusted through partners' capital/current accounts. This means that the adjustment should reflect in the capital accounts of the partners.
Explanation of the relationship between Assertion and Reason:
The Reason provides an explanation for the Assertion. When the old goodwill is written off among the old partners in the old ratio, it results in an adjustment in their capital accounts. This adjustment ensures that the value of the old goodwill is distributed among the partners based on their profit-sharing ratio.
Therefore, both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A). Option (b) is the correct answer.
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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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer?
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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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer?.
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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about 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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for 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): If goodwill is already appearing in the book, old goodwill should always be written off among old partners in the old ratio.Reason (R): The amount of goodwill should be adjusted through partners’ capital/current accounts.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'B'. Can you explain this answer?.
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