A & B are partners in a firm, sharing profits and losses in the ratio of 3:2. ‘C’ was admitted for 1/6 share in the future profits with a capital of Rs. 25,000. The new profit
sharing ratio will be
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Solution
5/6 will be divided between A and B in ratio 3 : 2.
A’s share = 3/6
B’s share = 2/6
New ratio will be 3/6 : 2/6 : 1/6
3 : 2 : 1.
Closing inventory of Rs. 19,000 in trial balance will be recorded in
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Solution
Closing inventory (if given in trial balance) will be recorded in balance sheet only.
The profits of last three years are Rs. 84,000, Rs. 78,000 and Rs. 90,000. Find out the goodwill of two years purchase.
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Solution
Average profit = Rs. 84,000 + 78,000 + 90,000 divided by 3 = Rs. 84,000.
Land and building is a
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Solution
Land and building is fixed asset not current.
Abnormal loss on consignment is credited to ______
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Solution
Abnormal loss on consignment will be credited to consignment A/c.
When money is withdrawn from the bank, the bank _______ the account of the customer.
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Solution
The Bank debits the account of customer when he/she withdraws money.
Prepaid salary account is
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Solution
Prepaid salary (belonging to some person) is a personal account.
Trial balance is a statement which shows the ______ or the ______ of all the accounts
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Solution
Trial balance shows debit or credit balances of all accounts.
Account payable normally has balance
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Solution
Account payable is a liability and has credit balance.
Capital expenditures are recorded in the
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Solution
Capital expenditures are recorded in the balance sheet as assets.