Assertion & Reason Type Questions: New Profit Sharing and Sacrificing Ratio
Q1: 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.
(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.
Ans: b
Sol: 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.
Q2: 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.
(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.
Ans: b
Sol: Ram is the gaining partner as his share of profit is increasing from 2th/5 to 1/2
Q3: 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.
(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.
Ans: b
Sol: 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.
Q4: 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.
(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.
Ans: a
Sol: 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.
Q5: 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.
(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.
Ans: b
Sol: 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.
Q6: 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.
(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.
Ans: b
Sol: Restructuring of the firm is when there is admission, retirement, death or even just change in the profit sharing ratio.
Q7: 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.
(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.
Ans: d
Sol: Dissolution of the partnership firm is also called the end of the partnership.
