On retirement of a partner, if the retiring partner is paid his dues in instalments, the method used is: MCQ with Answer and Explanation

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On retirement of a partner, if the retiring partner is paid his dues in instalments, the method used is:

A. Piecemeal distribution

B. Surplus capital method

C. Maximum loss method

D. Proportionate capital method

Answer: Option A

Solution (By JKSSB Mock Tests)

When dues are paid in instalments, piecemeal distribution (as per Garner vs Murray rule) is applied.

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

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Question #1

The term 'Amalgamation' in partnership refers to:

A. Retirement of a partner

B. Dissolution of the firm

C. Combination of two or more partnership firms

D. Insolvency of a partner

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Correct Answer: Option C

Explanation:
Amalgamation occurs when two or more existing partnership firms decide to merge their businesses into a new partnership firm.

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

Question #2

The 'Duty Drawback' scheme under Customs provides:

A. Exemption from income tax

B. Refund of duties on imported inputs used in exported goods

C. No refund

D. GST refund

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Correct Answer: Option B

Explanation:
Duty drawback refunds customs/excise duties paid on inputs used in exported products.

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Question #3

The 'Incremental Borrowing Rate' is used in lease accounting when:

A. Never

B. For all leases

C. The lessee cannot determine the interest rate implicit in the lease

D. The lessor does not disclose rate

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Correct Answer: Option C

Explanation:
If implicit rate is not readily determinable, lessee uses its incremental borrowing rate.

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

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