What are the answers to the following multiple-choice questions regarding partnership accounting: (xi) The interest on capital account in partnership is credited to? (xii) In the absence of an agreeme

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