Why it is considered desirable to make the partnership agreement in writing.
Partnership firm is an association between persons to carry out a business. The partners make an agreement to carry out the business which is known as partnership agreement. It states the agreed share of the profits of the business which might be carried out by all or by anyone of them acting on behalf of others.
The agreement may be oral or in writing. Under the Partnership Act, 1932 it is not at all binding to have a partnership agreement in writing. However in order to avoid misunderstandings and dispute among the partners it is recommended to have the agreement in writing. One more reason to have it in writing is, it helps in settling disputes as written agreement is often taken as a reference point. A written deed duly signed and registered under Partnership Act is considered as evidence by the court.
What is Capital Fund? How is it calculated?
What is sacrificing ratio? Why is it calculated?
If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?
Why there is need for the revaluation of assets and liabilities on the admission of a partner?
What is subscription? How is it calculated?
List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating.
Why is Profit and Loss Adjustment Account prepared? Explain.
If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?
On what occasions sacrificing ratio is used?
Identify various matters that need adjustments at the time of admission of a new partner.
State the meaning of Income and Expenditure Account.
Why there is need for the revaluation of assets and liabilities on the admission of a partner?
State the difference between dissolution of partnership and dissolution of partnership firm.
State the order of settlement of accounts on dissolution.
In the absence of Partnership deed, specify the rules relating to the following :
(i) Sharing of profits and losses.
(ii) Interest on partner’s capital.
(iii) Interest on Partner’s drawings.
(iv) Interest on Partner’s loan
(v) Salary to a partner.
List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating.
If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?
On what occasions sacrificing ratio is used?
Give two circumstances under which the fixed capitals of partners may change.
What are the features of Receipt and Payment Account?