According to the Garner vs. Murray rule, the deficiency of an insolvent partner must be borne by solvent partners in their: MCQ with Answer and Explanation

According to the Garner vs. Murray rule, the deficiency of an insolvent partner must be borne by solvent partners in their:
A. Profit Sharing Ratio
B. Gaining Ratio
C. Equal Ratio
D. Capital Ratio just before dissolution
Answer: Option D
Solution (By JKSSB Mock Tests)
The landmark ruling states that a capital loss due to insolvency must be borne by solvent partners in proportion to their last agreed capitals.

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Practice More Accountancy and Book Keeping Questions

Question #1
The 'Purchase Returns Book' records:
A. Credit purchases
B. Cash purchases
C. Goods returned to suppliers
D. Goods returned by customers

Correct Answer: Option C


Explanation:
Purchase returns (returns outward) are recorded in this subsidiary book.

Question #2
The 'Cost Records' under Companies Act 2013 are required to be maintained by:
A. Only manufacturing companies
B. All companies
C. Companies engaged in specified sectors as per MCA rules
D. Only service companies

Correct Answer: Option C


Explanation:
The central government specifies class of companies required to maintain cost records.

Question #3
S1: Under Ind AS 115, if a contract contains multiple performance obligations, the transaction price must be allocated to each obligation based on their relative standalone selling prices. S2: If the standalone selling price is not directly observable, the entity must estimate it using the adjusted market assessment approach or the expected cost plus a margin approach. Which statement(s) is/are correct?
A. S2 only
B. Both S1 and S2
C. Neither S1 nor S2
D. S1 only

Correct Answer: Option B


Explanation:
Both statements are correct as per Ind AS 115. The transaction price must be allocated based on standalone selling prices, and if not directly observable, the entity must estimate it using approved methods like adjusted market assessment or expected cost plus margin.