Why is Profit and Loss Adjustment Account prepared? Explain.
Profit and Loss Appropriation Account is merely an extension of the Profit and Loss Account of the firm. It shows how the profits are appropriated or distributed among the partners. All adjustments in respect of partner’s salary, partner’s commission, interest on capital, interest on drawings, etc. are made through this account. It starts with the net profit/net loss as per Profit and Loss Account.
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If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?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.
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?
Why it is considered desirable to make the partnership agreement in writing.
On what occasions sacrificing ratio is used?
Identify various matters that need adjustments at the time of admission of a new partner.
State the accounting treatment at the time of dissolution of a firm for:
i. Unrecorded assets ii. Unrecorded liabilities
List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating.
Define Partnership Deed.
How deficiency of crditors is paid off at the time of dissolution of firm.
Reproduce the format of Realisation Account.
State the meaning of ‘Not- for- Profit’ Organisations.
What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?
Give two circumstances under which the fixed capitals of partners may change.
Why there is need for the revaluation of assets and liabilities on the admission of a partner?
Why it is necessary to ascertain new profit sharing ratio even for old partners when a new partner is admitted?
This will help us lot
What are the things comes under p/l adjustment a/c
For this you may refer 3 golden rules of the accounts
How we know that we have to debit the amount or credit the amount....