S1: In a partnership, if the existing profit-sharing ratio is 3:2 and the new ratio is 1:1, the sacrificing/gaining ratio is 1:1. S2: If the old ratio is 3:2 and the new ratio is 2:3, Partner A sacrifices 1/5th and Partner B gains 1/5th. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: In a partnership, if the existing profit-sharing ratio is 3:2 and the new ratio is 1:1, the sacrificing/gaining ratio is 1:1. S2: If the old ratio is 3:2 and the new ratio is 2:3, Partner A sacrifices 1/5th and Partner B gains 1/5th. Which statement(s) is/are correct?
A. Neither S1 nor S2
B. Both S1 and S2
C. S2 only
D. S1 only
Answer: Option B
Solution (By JKSSB Mock Tests)
In S1, Sacrificing = Old - New. A: 3/5 - 1/2 = 1/10. B: 2/5 - 1/2 = -1/10. Ratio is 1:-1, which means 1:1 sacrificing/gaining. In S2, A: 3/5 - 2/5 = 1/5 sacrifice. B: 2/5 - 3/5 = -1/5 (gain). Both are correct.
Explanation:
The matching concept ensures that all expenses incurred to earn a specific revenue are recognized in the same accounting period to find the true profit.
Explanation:
The Cash Flow Statement provides historical information about changes in cash and cash equivalents, categorized into operating, investing, and financing activities.
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