Identify various matters that need adjustments at the time of admission of a new partner.
The following are the various items that need to be adjusted at the time of admission of a new partner.
1. Profit Sharing Ratio: Calculation of new profit sharing ratio.
2. Goodwill: Valuation and adjustment of goodwill among the sacrificing old partners.
3. Revaluation of Assets and Liabilities: Assets and liabilities are revalued to ascertain the current value of the assets and liabilities of the partnership firm. Moreover, the profit or loss due to the revaluation need to be distributed among the old partners.
4. Accumulated profits, losses and reserves are distributed among the old partners in their old ratio.
5. Adjustment of capital of the partners.
Popular Questions of Class 12 Accountancy
- Q:-
What is Capital Fund? How is it calculated?
- Q:-
What is sacrificing ratio? Why is it calculated?
- Q:-
If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?
- Q:-
Why there is need for the revaluation of assets and liabilities on the admission of a partner?
- Q:-
What is subscription? How is it calculated?
- Q:-
List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating. - Q:-
Why is Profit and Loss Adjustment Account prepared? Explain.
- Q:-
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?
- Q:-
Why it is considered desirable to make the partnership agreement in writing.
- Q:-
On what occasions sacrificing ratio is used?
Recently Viewed Questions of Class 12 Accountancy
- Q:-
State the accounting treatment at the time of dissolution of a firm for:
i. Unrecorded assets ii. Unrecorded liabilities - Q:-
On dissolution, how will you deal with partner’s loan if it appears on the
(a) assets side of the balance sheet, (b) liabilities side of balance sheet. - Q:-
How deficiency of crditors is paid off at the time of dissolution of firm.
- Q:-
Explain the process dissolution of partnership firm?
- Q:-
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. - Q:-
Define Partnership Deed.
- Q:-
State the meaning of ‘Not- for- Profit’ Organisations.
- Q:-
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?
- Q:-
What is sacrificing ratio? Why is it calculated?
- Q:-
Why there is need for the revaluation of assets and liabilities on the admission of a partner?
1 Comment(s) on this Question
Very nice answer of this question
- NCERT Chapter