This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
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Here are the solutions to the multiple-choice questions: (xi) The interest on capital account in partnership is credited to Interest on capital is an appropriation of profit that increases a partner's capital. Therefore, it is credited to the partner's capital account. The correct option is C. C) Partner's capital account (xii) In the absence of an agreement, interest on loan advanced by a partner to the firm is allowed at the rate of According to the Indian Partnership Act, 1932 (and similar partnership laws), if there is no partnership agreement, interest on a loan provided by a partner to the firm is allowed at 6% per annum. The correct option is A. A) Six percent (xiii) At the time of admission of a new partner, goodwill raised should be written off in: When goodwill is raised (created) upon the admission of a new partner, it is typically written off among the old partners in their old profit-sharing ratio to adjust their capital accounts for the goodwill that existed before the new partner joined. The correct option is B. B) Old profit sharing ratio (xiv) Sacrifice ratio is equal to: The sacrificing ratio represents the proportion of profit share that old partners give up in favor of a new partner or due to a change in the profit-sharing ratio. It is calculated by subtracting the new share from the old share. The correct option is B. B) Old ratio - New ratio (xv) Revaluation account is prepared to determine the profit or loss on the revaluation of assets and liabilities when a: A Revaluation Account is prepared to ascertain the profit or loss arising from the revaluation of assets and liabilities. This is necessary whenever there is a change in the partnership constitution, such as the admission of a new partner, retirement of an existing partner, or death of a partner. The correct option is D. D) All of these