A and B share profits in the ratio of 3:2. On retirement of B, the firm records a loss on revaluation of Rs. 25,000. What amount is debited to B's capital account?
Correct answer: B. Rs. 10,000
- A. Rs. 5,000
- B. Rs. 10,000
- C. Rs. 15,000
- D. Rs. 25,000
Explanation
A revaluation loss is borne by the partners in their old profit-sharing ratio. B's share is two-fifths of Rs. 25,000, equal to Rs. 10,000.
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About Partnership Accounts
Partnership accounts cover the partnership agreement, capital and current accounts, profit and loss appropriation, salaries, interest on capital, interest on drawings and profit-sharing ratios. They also address changes in partnership, including admission, retirement, goodwill, revaluation, dissolution and the settlement of partners’ balances.
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