Net increase in working capital other than cash and cash equivalents will increase, decrease or not change cash flow from operating activities. Give reason in support of your answer.
The formula of working capital = Current assets - Current liability
Net increase in working capital denotes that inflow (decrease in current assets and increase in current liability) is more than outflow (increase in current assets and decrease in current liability).
So the impact would be the net increase in cash flow from operating activity.
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If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?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?
Why it is considered desirable to make the partnership agreement in writing.
On what occasions sacrificing ratio is used?
What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?
Write the various matters that need adjustments at the time of retirement of partner/partners.
Why is Profit and Loss Adjustment Account prepared? Explain.
What are the features of Receipt and Payment Account?
On what occasions sacrificing ratio is used?
State whether the following statements are true or false:
(i) Valid partnership can be formulated even without a written agreement between the partners;
(ii) Each partner carrying on the business is the principal as well as the agent for all the other partners;
(iii) Maximum number of partners can be 50;
(iv) Methods of settlement of dispute among the partners can’t be part of the partnership deed;
(v) If the deed is silent, interest at the rate of 6% p.a. would be charged on the drawings made by the partner;
(vi) Interest on partner’s loan is to be given @ 12% p.a. if the deed is silent about the rate.
State the meaning of Income and Expenditure Account.
If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?
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?
Explain the process dissolution of partnership firm?