S1: The sacrificing ratio is used during the admission of a new partner. S2: The gaining ratio is used during the retirement of a partner. Which statement(s) is/are correct? MCQ with Answer and Explanation

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S1: The sacrificing ratio is used during the admission of a new partner. S2: The gaining ratio is used during the retirement of a partner. Which statement(s) is/are correct?

A. Neither S1 nor S2

B. S2 only

C. S1 only

D. Both S1 and S2

Answer: Option D

Solution (By JKExamLibrary)

The sacrificing ratio determines how much share existing partners give up to the new partner. The gaining ratio determines how much share continuing partners acquire from the retiring partner. Both are correct.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

The 'Anti-Dumping Duty' is imposed to:

A. Increase imports

B. Promote exports

C. Reduce customs duty

D. Protect domestic industry from cheap imports sold below normal value

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Correct Answer: Option D

Explanation:
Anti-dumping duty is a trade remedy measure.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2 Report Error

A firm has an average profit of ₹50,000, normal rate of return 10%, capital employed ₹4,00,000. Goodwill by capitalization of super profit method (if capitalized at 10%) will be:

A. ₹1,00,000

B. ₹50,000

C. ₹2,00,000

D. ₹10,000

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Correct Answer: Option A

Explanation:
Normal profit = 10% of 4,00,000 = 40,000. Super profit = 50,000 - 40,000 = 10,000. Goodwill by capitalization of super profit = 10,000 / 10% = ₹1,00,000.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping