In a partnership firm, if the Profit Sharing Ratio is changed, accumulated profits are distributed among partners in their: MCQ with Answer and Explanation

In a partnership firm, if the Profit Sharing Ratio is changed, accumulated profits are distributed among partners in their:
A. Gaining Ratio
B. New Ratio
C. Sacrificing Ratio
D. Old Ratio
Answer: Option D
Solution (By JKSSB Mock Tests)
Accumulated profits were earned in the past when the old ratio was applicable; thus, they belong to the partners in their old profit sharing ratio.

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Practice More Accountancy and Book Keeping Questions

Question #1
In the context of AS 28 (Impairment of Assets), if a Cash Generating Unit (CGU) is impaired, the impairment loss is allocated to reduce the carrying amount of assets in what order?
A. First to goodwill, then to other assets pro-rata based on carrying amounts
B. Pro-rata based on carrying amounts of all assets
C. Equally to all tangible assets, ignoring intangible assets
D. First to other assets, then to goodwill

Correct Answer: Option A


Explanation:
AS 28 dictates that an impairment loss for a CGU must first reduce the carrying amount of any goodwill allocated to the CGU, and then to the other assets pro-rata based on their carrying amounts.

Question #2
In recent years, which technology has significantly impacted accounting?
A. Artificial intelligence
B. Cloud computing
C. Blockchain
D. All of these

Correct Answer: Option D


Explanation:
All these technologies (cloud, AI, blockchain) are transforming accounting by automating tasks, improving accuracy, and enabling real-time reporting.

Question #3
The 'Consolidation Procedure' under AS 21 requires:
A. Line by line adding of like items of assets, liabilities, income, expenses
B. Only adding assets
C. Only adding profits
D. Ignoring subsidiary's data

Correct Answer: Option A


Explanation:
Consolidation combines similar items and eliminates intra-group transactions.