Accounts - 4. page

COMPANY ACCOUNTS : Sole proprietorship is the most common type of business when the size of business is small. Partnership became popular as the size increased. As firms became very […]

Distinction between Sacrificing Ratio and Gaining Ratio Sacrificing Ratio and Gaining Ratio can be distinguished as follows: Basis of Distinction Sacrificing Ratio Gaining Ratio 1.                  Meaning It is the ratio […]

Adjustments: When a partner retires, the following accounting adjustments are necessary 1. Calculation of New profit sharing ratio and Gaining ratio 2. Revaluation of assets and liabilities 3. Transfer of […]

Calculation of New Profit sharing ratio and Gaining ratio : At the time of retirement of a partner, the remaining partners acquire some portion of the retiring partner’s share of […]

Transfer of Undistributed Profit or Loss : Some times, the balance sheet of the partnership firm may show undistributed profits in the form of profit and loss account in the […]

Transfer of Accumulated Reserve : Sometimes, Partners of the firm, may set aside a portion or percentage of the profit earned to meet the unexpected or unforeseen  losses arise in […]

Treatment of Goodwill: The goodwill is the result of the old partners’ efforts in the past. Therefore, at the time of admission of new partner the goodwill is to be […]

Preparation of Revaluation Account, Capital Accounts and Balance Sheet after admission of Partner : Illustration :  Anitha and Vanitha are partners. They share profits and losses in the ratio of […]

Meaning  of Retirement : According to section 32(1) of the Indian Partnership Act 1932, a partner may retire from the firm 1) with the consent of all the partners 2) in […]

Calculation of New Profit Sharing ratio and Sacrificing Ratio : When a new partner is admitted, he acquires his share in profits from the old partners. This reduces the old […]