Adjustment of Accumulated Reserves

Q.

What is memorandum revaluation account?

Q. When the general reserve is distributed between all the partner's, then account is debited and account is credited.

1. accumulated profits
2. general reserve
3. goodwill
4. bank

Q.

The retiring partner is entitled to his/her share in the accumulated profits and is also liable to share the accumulated losses, if any.

1. None of the above

2. False

Q.

Reserve shown in the Balance sheet are transferred to the credit side of capital accounts at the time of retirement of a partner

1. Cannot say
2. None of these

3. True

4. False

Q.

At the time of retirement, if there are accumulated profits or losses, they should be transferred to the capital accounts of all partners in their ___

1. None of the above

2. Gaining Ratio

3. Old Ratio

4. Sacrificing ratio

Q. Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).

Assertion (A) - Any reserves or accumulated profits/losses appearing in the balance sheet should be transferred to the partner’s capital accounts in an old ratio.

Reason (R) - Accumulated profits/losses appear in the balance sheet after a change in profit-sharing ratio.

[0.88 marks]

1. Both A and R are true, and R is the correct explanation of A.
2. Both A and R are true, but R is not the correct explanation of A.
3. A is true, but R is false.
4. A is false, but R is true.

Q.

Accumulated Profits/ Losses & Reserves on the retirement of a partner is shared by the partners in their :

1. Old Profit Sharing ratio

2. New Profit Sharing Ratio

3. Capital Ratio

4. Gaining Ratio

Q.

To transfer the accumulated profits, all the capital accounts of partners are ___

1. either A or B

2. credited

3. debited

4. None of these

Q.

To transfer the accumulated losses, all the capital accounts of partners are _________ with their share of losses.

1. Either A or B

2. None of the above

3. credited

4. debited

Q. A specific reserve created to compensate workers in the event of any medical illnesses while they are working is called compensation reserve.

1. workmen compensation
2. general
3. capital
4. illness reserve

Q.

At the time of retirement, if there are accumulated profits or losses, they should be transferred to the capital accounts of ………....

1. None of the above

2. All partners

3. Outgoing partner

4. Ongoing partners

Q. Following is the balance sheet of A, B, and C who share profits and losses of the business in the ratio of 3:2:1.

Additional Information:
a. On 1st April, 2021, they admitted D as a partner for 1/4th for which he brought ₹1, 20, 000 as his capital and ₹30, 000 as a share of goodwill.
b.The value of furniture has increased by 10%.
c. Market value of investments brought down to ₹2, 00, 000.

Investment fluctuation reserve will be distributed between:

[2 marks]

1. Old partners in old share
2. New partners in new share
3. Old partners in sacrificing ratio
4. Old partner in gaining ratio

Q. The creditors accounts, generally, have credit balance. Debit balance may be due to _________.

1. advance paid against an order
2. goods returned
3. wrong debit to supplier account
4. any of these

Q. Identify which of the following is the primary emphasis of managers to evaluate the ratios of a company:

[0.88 marks]

1. Return on investment
2. Future growth of organisation
3. Long-term solvency of the organisation
4. Timely payment

Q. A and B are partners in a firm sharing profit and loss in the ratio of 3 : 2. They admit C into partnership for 1/4 share and the new ratio between A and B is 2 : 1. The sacrificing ratio is____.

1. 1 : 1
2. 2 : 1
3. 3 : 1
4. 2 : 3

Q. Legacy is generally shown on the____________.

1. Debit side of Receipts and Payments A/c
2. Credit side of Receipt and Payments A/c.
3. Credit side of Income and Expenditure A/c
4. Debit side of Income and Expenditure A/c.

Q. State whether the following statement are True or False.

Debit balance of Trading account shows gross profit.

Q. New bad debts are added to ______.

1. Cash account
2. Creditor account
3. Debtors account
4. Bad debts account

Q. Decrease in owner's equity arising from delivery of goods or rendering of services to customers is termed as ________.

1. Revenue
2. Gain
3. Expenses
4. Loss

Q. Irrecoverable part of debtors is called as ______.

1. Creditor
2. Discount
3. Bad debts
4. Earnings

Q. Kiran and Roshni have entered in a joint venture and keep separate accounts of joint venture. Kiran sold some goods on credit. Some amount of this sale become bad. Which account will be debited for this bad-debt?

1. Kiran A/c
2. Debtor's A/c
3. Cash A/c
4. Joint Venture A/c

Q. R & S are in partnership sharing profit and losses at the ratio $3:2$. They take T as a new partner. Calculate the new profit sharing ratio, if R & S agree to sacrifice $1/10$th share to T in the ratio of $2:3$.

1. $27:18:5$
2. $5:4:1$
3. $28:17:5$
4. $19:19:12$

Q. In the event of death of partner, the amount of General Reserve is transferred to partner's capital Accounts in ______________ .

1. The new profit-sharing ratio.
2. The old profit-sharing ratio.
3. The capital ratio.
4. None of these

Q. Excess of total of debit side of cash book over credit side of cash book shows....

1. Excess of income over expenditure
2. Cash in hand
3. Discrepancy in cash book
4. Cheques awaiting clearance by bank

Q. A retiring partner is entitled to ___________.

1. share of goodwill
2. balance in his capital / current account
3. share in the revaluation of assets and liabilities, accumulated profit and loss
4. all of the above

Q. The amount realised at the end of working life of an asset ___________.

1. Residual value
2. Market price
3. Original cost
4. Written down value

Q. What is the term used to figure out the amount which is not recoverable from the debtors?

Q. Net surplus/deficiency on disposal/replacement/discarding of an asset is credited/charged to ___________.

1. Trading a/c
2. Capital Reserve a/c
3. Profit and loss a/c
4. Revaluation a/c

Q. A, B, C are partners sharing profits and losses in the ratio of $4/9:1/3:2/9$. B retires and surrenders $1/9$th of his share in favour of A and remaining in support of C. The new profit sharing ratio will be ______.

1. $13:14$
2. $14:13$
3. $8:1$
4. $1:8$

Q. New bad debt is deducted from ______.

1. Old bad debts account
2. Creditors account
3. Debtors account
4. Profit & loss account