Outgoing partner is compensated for parting with firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in
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Solution
Remaining partners contribute to such compensation amount in their gaining ratio.
When balance as per Cash book is the starting point, Dividend collected by bank is:
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Solution
Dividend collected by bank will be added in bank reconciliation statement in the given case.
Debit balance of the cash is
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Solution
Debit balance of cash is an asset.
When preparing a Bank Reconciliation Statement, if you start with credit balance as per Pass Book, then cheque deposited in the bank but not credited within the period are
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Solution
Cheque deposited in bank but not credited are added to the pass book balance while preparing bank reconciliation statement.
A company purchased a plant for Rs. 5,000. The useful life of the plant is 10 years and the residual value is Rs. 500. SLM rate of depreciation will be
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Solution
Rate of depreciation is 9%. Rs. 450 per year (Rs. 4,500/10).
After the death of a partner, amount payable is received by
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Solution
Amount payable is received by executor of the dead partner.
In case of admission of a partner, the first account prepared is
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Solution
At first, revaluation account is prepared at time of admission of a partner for revaluation of assets / liabilities.
Profit or loss on revaluation is shared among the partners in
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Solution
Profit/loss on revaluation is shared among the old partners in old profit ratio.
Which of the followings is a valuation principal?
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Solution
Current cost, Historical cost and Realizable value all are valuation principles.
Selection of accounting policies is based on:
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Solution
Selection of accounting policy is based on prudence, substance over form and materiality.