Meaning of Investment Fluctuation Reserve Meaning of Investment We all earn income and make expenses. We all save some part of our income for future for known or unknown expenses. Suppose Mr A earns Rs 10 Lakhs every year and spends Rs 8 Lakhs every year on meeting his own and family expenses. So every […]
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Meaning of Workmen Compensation Reserve Meaning of Workmen Workmen means any person (male or female) working as an employee of the firm. Traditionally the term workmen is used to refer to the people who do labour work. But here it can be an employee working at any level in the organization or doing any kind
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Five types of adjustments are required on the admission of a new partner in a partnership firm The above five types of adjustments are common for every type of reconstitution of partnership firm which includes: Thus the above said 5 types of adjustments will be done in each case of reconstitution of partnership firm
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There can be different situations for accounting for Goodwill : Below we will discuss accounting entries for each of the above cases. Where the goodwill is paid privately Normally , first the new partner will pay Goodwill brought in by him to the firm and then firm will pay each old partners share to them.
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Sacrificing Ratio New profit Sharing Ratio It is the ratio in which old partners give their share to new partner/s It is the share in which all the partners (including new partner) share profits and losses in the future. It is related only to the old partners. it pertains to all the partners (including new
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Suppose A, B and C are partners in a firm sharing profits in the ratio of 3:2:1. D is admitted to the partnership and the profit sharing ratio in future will be 1 : 1 : 1 : 1. In this case 3:2:1 is called the old ratio and 1 : 1 : 1 :
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Admission of a partner in a partnership firm refers to the process of adding a new member to the partnership. When a new partner is admitted to the partnership, they become jointly and severally liable for the partnership’s debts and obligations. This means that each individual partner is responsible for the entire amount of the
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