A and B are partners sharing profits 3:2. C is admitted for 1/5th share, which he acquires equally from A and B. The new profit-sharing ratio is: MCQ with Answer and Explanation

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A and B are partners sharing profits 3:2. C is admitted for 1/5th share, which he acquires equally from A and B. The new profit-sharing ratio is:

A. 3:2:1

B. 4:3:2

C. 9:6:5

D. 5:3:2

Answer: Option D

Solution (By JKSSB Mock Tests)

A's new share = 3/5 - 1/10 = 5/10, B's new = 2/5 - 1/10 = 3/10, C's = 2/10. Ratio 5:3:2.

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Question #1

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A partner's current account will have a credit balance if:

A. His share of profit and interest on capital exceed his drawings

B. His drawings exceed his share of profit

C. He has withdrawn all profits

D. Firm incurs loss

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Correct Answer: Option A

Explanation:
Current account credit balance indicates net amount owed by firm to partner, i.e., profits and interest etc. exceed drawings.

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Question #2

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The term 'Liquidity Ratio' includes:

A. Debt-Equity Ratio and Proprietary Ratio

B. Gross Profit Ratio and Net Profit Ratio

C. Current Ratio and Quick Ratio

D. Stock Turnover Ratio and Debtors Turnover Ratio

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Correct Answer: Option C

Explanation:
Liquidity ratios measure the short-term solvency of a firm and include the Current Ratio and the Quick (or Acid-Test) Ratio.

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Question #3

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A partnership deed is:

A. Necessary only if more than 2 partners

B. Required only for banking partnership

C. Desirable but not mandatory

D. Mandatory by law

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Correct Answer: Option C

Explanation:
Partnership deed is not compulsory but advisable to avoid disputes. Partnership can exist based on oral agreement.

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