S1: The sacrificing ratio is always in the old profit-sharing ratio. S2: The gaining ratio is always in the new profit-sharing ratio. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: The sacrificing ratio is always in the old profit-sharing ratio. S2: The gaining ratio is always in the new profit-sharing ratio. Which statement(s) is/are correct?
A. S1 only
B. Both S1 and S2
C. S2 only
D. Neither S1 nor S2
Answer: Option D
Solution (By JKSSB Mock Tests)
The sacrificing ratio is calculated as Old Ratio - New Ratio. The gaining ratio is calculated as New Ratio - Old Ratio. They are not necessarily the same as the old or new ratios unless specifically stated. Both are incorrect.
Explanation:
Budgeting is a management accounting tool for planning, not a step in the standard financial accounting cycle which ends with financial statements.
S1: Bank Reconciliation Statement is prepared by the bank. S2: Bank Reconciliation Statement is prepared on a specific date. Which statement(s) is/are correct?
Explanation:
BRS is prepared by the account holder (the customer), not the bank. It is prepared for a specific date to reconcile the balances as per the Cash Book and the Pass Book on that day. S1 is incorrect, S2 is correct.
Explanation:
Standard costing is a management tool for cost control. It achieves this by establishing standard (predetermined) costs and comparing them with actual costs to identify and analyze variances for corrective action. R correctly explains A.
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