In partnership accounts, Garner vs. Murray rule applies to the situation of: MCQ with Answer and Explanation

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In partnership accounts, Garner vs. Murray rule applies to the situation of:

A. Change in profit sharing ratio

B. Admission of a partner

C. Insolvency of a partner during dissolution

D. Retirement of a partner

Answer: Option C

Solution (By JKSSB Mock Tests)

The rule dictates that if a partner becomes insolvent, the capital deficiency is borne by solvent partners in the ratio of their last agreed capital.

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

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Question #1

Blockchain technology in accounting is primarily used for:

A. Preparing tax returns

B. Immutable and transparent record-keeping

C. Calculating depreciation

D. Manual ledger posting

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Correct Answer: Option B

Explanation:
Blockchain provides a distributed ledger that is secure, transparent, and tamper-proof.

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

Question #2

Interest on partners' capital is:

A. An appropriation of profit

B. Not allowed

C. Always 6%

D. A charge against profit

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Correct Answer: Option A

Explanation:
Interest on capital, when deed provides, is an appropriation of profit, not a charge.

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

Question #3

Net loss for a period is ultimately adjusted against:

A. Assets

B. Sales

C. Liabilities

D. Capital

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Correct Answer: Option D

Explanation:
Net loss reduces owner's equity/capital.

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

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