Question : At the time of admission of a partner, Employees Provident Fund is:
Option 1: Distributed to partners in the old profit sharing ratio
Option 2: Distributed to partners in the new profit sharing ratio
Option 3: Adjusted through gaining ratio
Option 4: Should be shown on the liabilities side of new firm Balance Sheet
Correct Answer: Should be shown on the liabilities side of new firm Balance Sheet
Solution : Answer = Should be shown on the liabilities side of the new firm Balance Sheet
At the time of admission of a partner, the Employees Provident Fund (EPF) is a liability of the firm and should be shown on the liabilities side of the new firm's balance sheet. It is not distributed to partners but is retained as a liability of the firm to fulfill its obligations towards employees. Hence, the correct option is 4.
Question : At the time of reconstruction of a partnership due to admission of a new partner, the balance of the Workmen Compensation Reserve will be transferred to:
Option 1: Old partners in the sacrificing ratio
Option 2: Old partners in their old profit sharing ratio
Option 3: Revaluation Account
Option 4: All partners in the new profit sharing ratio
Question : When goodwill existing in the books is written off at the time of admission of a partner it is transferred to Partners' Capital Accounts in their
Option 1: Old profit-sharing ratio
Option 2: New profit-sharing ratio
Option 3: Sacrificing ratio
Option 4: Gaining ratio
Question : Distribution of 'profit and loss (credit) at the time of change in profit sharing ratio of existing partners is shared by ______(i)_____ whereas in case of admission of a partner, it is shared by_____(ii)_____.
Option 1: (i) Remaining Partners, (ii) All Partners.
Option 2: (i) All Partners, (ii) Old partners.
Option 3: (i) New Partner, (ii) All partner
Option 4: (i) Sacrificing Partner, (ii) Incoming partner
Question : Gain/loss on revaluation at the time of change in profit sharing ratio of existing partners is shared by ______(i)_____ whereas in case of admission of a partner, it is shared by _____(ii)_____.
Question : Which of the following is not true with respect to Admission of a partner?
Option 1: A new partner can be admitted if it is agreed in the partnership deed.
Option 2: If all the partners agree, a new partner can be admitted.
Option 3: A new partner has to bring relatively higher capital as compared to the existing partners.
Option 4: A new partner gets right in the assets of the firm.
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