Question : Assertion A:- N, M and O are partners sharing profits in the ratio of 2:2:1. They changed their profit-sharing ratio to 3:2:1 on that date, and goodwill existed in the books at Rs 50,000. It will be written off in the ratio of 2:2:1.

Reason R:- Goodwill existing in the books is purchased goodwill and is written off among the partners in the old profit-sharing ratio when the firm is reconstituted.

 

Option 1: Assertion A and Reason R are correct but the reason R is not the correct explanation of Assertion A

Option 2: Both Assertion A and Reason R are correct and Reason R is the correct explanation of Assertion A 

Option 3: Only Assertion A is correct 

Option 4: Assertion A is not correct but Reason R is correct

Question : Assertion A:- In the books of Suhni, Reema and Chandni, advertisement suspense existed at Rs 1,80,000. The profit-sharing ratio was changed from equal sharing to 5:3:2. Rs 1,80,000 will be written off equally at the time of change in the profit-sharing ratio.

Reason R:- Advertisement suspense is written off in the old profit-sharing ratio when the profit-sharing ratio changes. 

Option 1: Assertion A and Reason R are correct but Reason R is not the correct explanation of Assertion A

 

Option 2: Both Assertion A and Reason R are correct and Reason R is the correct explanation of Assertion A 
 

Option 3: Only Assertion A is correct 
 

Option 4: Assertion A is not correct but the Reason R is correct

Question : Assertion A:-  A and Z are partners sharing profit in the ratio of 3:2. They agree to new terms of the partnership, and both the partners will get interested in capital and also remuneration, goodwill will be valued and gaining partners will compensate the sacrificing partners.

Reason R:- The profit-sharing ratio of  A and Z has not changed. Hence, there is neither a gaining partner nor a sacrificing partner. Therefore, goodwill need not be valued.

In the context of the above two statements, which of the following is correct?

Option 1: Assertion A and Reason R are correct but the reason R is not the correct explanation of Assertion A

Option 2: Both Assertion A and Reason R are correct and Reason R is the correct explanation of Asseration A 

Option 3: Only Assertion A is correct

Option 4: Assertion A is not correct but the Reason R is correct.

Question : Assertions A:-   Valuation of goodwill is necessary at the time of the firm’s reconstitution because gaining partners have to complete the sacrifice partners to gain profit share. 

Reason R:-  Goodwill is an intangible asset which recognized in the books of account if an amount is paid for it.

In the context of the above statement, which of the following is correct?

Option 1: Assertion A and Reason R are correct but the reason R is not the correct explanation of Assertion A.

Option 2: Both Assertion A and Reason R are correct and Reason R is correct explanation of Assertions A.

Option 3: Assertion A is correct but the reason R is not correct.

Option 4: Both Assertion A and reason R are incorrect.

Question : Assertion (A): When partners agree on a profit-sharing ratio, they also agree on a loss-sharing ratio.

Reason (R): Although it is stated in the definition that profits will be shared. However, profits also include losses.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Both Assertion (A) and Reason (R) are not correct.

Question : Assertion (A) Partner distribution of earnings and losses is based on their profit sharing ratio, not their capitalization ratio.
Reason (R): Profit is dispersed in proportion to appropriations if the amount of appropriations is greater than the amount of profit available for distribution.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Both Assertion (A) and Reason (R) are not correct.