Multiple Choice Questions on Sony and Romy are equal partners with fixed capitals of rs4 00 000 and rs3 00 000 respectively After........... for Commerce 12th Preparation

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Multiple Choice Questions

Sony and Romy are equal partners with fixed capitals of rs4 00 000 and rs3 00 000 respectively After...........

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    Sony and Romy are equal partners with fixed capitals of rs4,00,000 and rs3,00,000 respectively. After closing the accounts for the year ending 31st March, 2019 it was discovered that interest on capitals was provided @ 8% instead of 10% p.a. In the adjusting entry :

    Sony will be credited by rs8,000 and Romy will be credited by rs6,000.

    Correct Answer

    Sony will be debited by rs8,000 and Romy will be debited by rs6,000.

    Incorrect Answer

    Sony will be debited by rs1,000 and Romy will be credited by rs1,000.

    Incorrect Answer

    Sony will be credited by rs1,000 and Romy will be debited by rs1,000.

    Incorrect Answer
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    Explanation:

    - Sony's fixed capital is Rs 4,00,000; Romy's is Rs 3,00,000.

    - The interest meant to be applied was 10%, but only 8% was used.

    - Correct interest for Sony is 10% of Rs 4,00,000 = Rs 40,000; received Rs 32,000.

    - Correct interest for Romy is 10% of Rs 3,00,000 = Rs 30,000; received Rs 24,000.

    - Sony needs an additional Rs 8,000; Romy needs an additional Rs 6,000.

    Your Options:

    - Option 1: Correctly credits the differences.

    - Option 2: Incorrectly debits.

    - Option 3: Misapplies adjustments.

    - Option 4: Doesn’t resolve discrepancies accurately.

    Correct Answer: Option 1: Sony will be credited by Rs 8,000 and Romy will be credited by Rs 6,000.

    By: santosh
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