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(i) Give two differences between Net Profit and Cash from Operations. 

(ii) When does loss on Issue of Debentures arise ? 

(iii) Give two differences between Authorized Capital and Issued Capital. 

(iv) Why is the word Memorandum affixed to the Memorandum Joint Venture Account ? 

(v) How is double entry completed in the Journal Ledger when ledgers are kept under the Self Balancing System ? 

(vi) What is the accounting treatment of Employees Provident Fund appearing in the Balance Sheet of a partnership firm at the time of its dissolution ? 

(vii) Give the formula for computing Price Earning Ratio. 

(viii) Give two differences between Reserve Capital and Capital Reserve.

(ix) How will the firm show the amount payable to the retiring partner, if it is not in a position to immediately pay the amount due to him on his retirement ? 

(x) What accounting steps are taken by a partnership firm when a new partner is unable to bring the business guaranteed by him ?

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(ii) Loss on Issue of Debentures arises when debentures are to be redeemed at a value higher than their face value.

(iv) The word Memorandum is affixed to the Memorandum Joint Venture Account because it is not a part of the Double Entry System of Book Keeping. It is just a rough account prepared to calculate the Profit or Loss.

(v) Employees Provident Fund to be credited to the Realization Account as a liability and it’s payment is also to be debited to the Realization Account.

(v) Employees Provident Fund A/c Dr.

To Realization A/c 

(Being employees’ provident fund transferred)

Realization A/c Dr. 

To Bank A/c 

(Being employees provident fund paid off)

(ix) The amount payable to the retiring partner would be transferred to his Loan Account and reflected in the Balance Sheet as a liability .

(x) The deficient amount would be debited to the New Partner’s Capital Account and Credited to the Profit and Loss Appropriation Account.

New Partner’s Capital A/c Dr. 

To Profit & Loss Appropriation A/c 

(Being deficient amount in the business guaranteed adjusted)

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