Adjustments in Partner's Capital Accounts

Q.

Why is there need for the revaluation of assets and liabilities on the admission of a partner?

Q.

Why there is a need for the revaluation of assets and liabilities on the admission of a partner?

Q.

Partner's Capital A/c is debited:

1. To record the General Reserve

2. To record the profit on revaluation

3. To record the P&L A/c

4. To record the shortage of capital brought in

Q.

Partner's capital A/c is debited :

1. to record the shortage of capital brought in

2. to record the P&L A/c (Dr.)

3. to record the profit on revaluation

4. to record the general reserve

Q.

Revaluation A/c is debited :

1. To transfer loss on revaluation

2. a decrease in the amount of creditors

3. an increase in the value of Land and Building

4. an increase in Provision for doubtful debts

Q. Mention the items that may appear on the debit side of the Capital Account of a partner when the capitals are fluctuating.

Q. We do the revaluation of assets and liabilities because only the partners want to share all the gains or losses between them.

1. existing
2. new
3. sacrificing
4. gaining

Q.

We do the revaluation of assets and liabilities because the ____________ partners wanted to share all the gains or losses between them without involving the _________ partner

1. new, new

2. existing, existing

3. new, existing

4. existing, new

Q. To which account unrecorded asstes/liabilities are transferred?

1. Revaluation A/c
2. Profit and loss appropriation A/c
3. Partners capital A/c
4. Any of the above

Q. When capitals are fixed, the loss arising out of insolvency of a partner will be borne by other solvent partners in the ____________________.

1. Ratio of their fixed capital
2. Ratio of fixed capital plus current accounts
3. Profit sharing ratio
4. Ratio of their capital after making necessary adjustments

Q. A debit balance on a partner's current account must indicate that _________.

1. they have a credit balance on their capital account
2. they have withdrawn more than they have earned in the partnership
3. drawings are higher than the profit share for that year
4. they are insolvent

Q. Prepaid expense is treated as __________.

1. current asset
2. current liability
3. short-term liability
4. none of the above

Q.

In case of revaluation loss, it should be borne by

1. Goodwill

2. Investment

3. stock

4. Fixed Assets

Q. Which does not come under liabilities?

1. Bank overdraft
2. Income in advance
3. Debtors
4. Creditors

Q. Select the most appropriate alternative from those given below :

Assets and liabilities are transferred to Realisation Account at their ____________values.
a) market
b) purchase
c) sale
d) book

Q. How unrecorded assets are treated at the time of retirement of a partner?

1. Credited to the capital account of retiring partner only.
2. Credited to revaluation account.
3. Debited to revaluation account.
4. Credited to partner's capital account.

Q. Why is revaluation of assets on reconstitution of partnership necessary?

Q. Briefly explain the statement ' wrongly debited by the bank' with the help of an example.