In what way can goodwill be written off in a partnership business?
Using the partner's profit and loss sharing ratio
By neglecting the ratio of partners capital contributions
By sharing it unequally among the partners where no agreement exists
By sharing it among the active partners only
Correct answer is A
To put it in other words, if we want to carry forward existing Goodwill in the books, then the value of existing Goodwill should be deducted from the new value of Goodwill. This excess value of Goodwill must be credited to the existing partners capital accounts in their profit sharing ratio.
3:5
1:2
2:5
1:5
Correct answer is D
No explanation has been provided for this answer.
#62,000
#48,000
#44,000
#43,000
Correct answer is B
No explanation has been provided for this answer.
Cost price
Fixed percentage on cost
Selling price
Invoice price
Correct answer is D
Invoice Price Method Branch Accounting. In branch accounting, head office sends the goods to branch on the invoice price instead of cost price because with this, company can hide his profit margin from branch employees. In the invoice price, there are two prices will be included on is cost price and second is profit %.
In the head office ledger, the value of goods sent to the branch are
Debited to the head office current account
Debited to the branch current account
Credited to the head office current account
Credited to the branch current account
Correct answer is B
Goods sent to branch is recorded at the debit side of the branch stock account. Goods returned to head office and closing stock is shown at the credit side of this account. The excess of debit over credit is shortage. The excess of credit over debit is surplus.