87. Cash sale of old asset (without profit or loss) is recorded in the journal by passing the following entry (A) Cash Account Dr. to Sales Account Cr. (B) Buyer’s Account Dr. to Asset Account Cr. (C) Assets Account Dr. to Cash Account Cr. (D) Cash Account Dr. to Asset Account Cr.
Explanation: When an asset is sold for cash, the Cash Account (an asset) is debited (increased), and the specific Asset Account (which is going out of the business) is credited (decreased).
88. Retirement/death of a partner will not lead to dissolution if: (A) remaining partners are agreed on continuing it (B) there is no consensus on future (C) deed does not specify anything on it (D) None of these
Explanation: The retirement or death of a partner technically ends the original partnership agreement (dissolution of partnership), but the business itself can continue if the remaining partners agree to operate under a new agreement (reconstitution of the firm).
89. Current assets of a company do not include: (A) Cash (B) Stock (C) Debtors (D) Goodwill
Explanation: Goodwill is an Intangible Fixed Asset (Non-Current Asset). Cash, Stock (Inventory), and Debtors are all classified as Current Assets.
90. Which of the following is not included in the ‘Intangible Assets’ category of a company’s balance sheet? (A) Patents (B) Copyright (C) Inventory (D) Franchise
Explanation: Inventory (Stock) is a Tangible Current Asset (physical substance). Patents, Copyright, and Franchise are assets that lack physical existence and are therefore Intangible Assets.
91. Under which situation is the revaluation account prepared? (A) Change in profit sharing ratio (B) Admission of a partner (C) Retirement of a partner (D) All of these
Explanation: The Revaluation Account is prepared on the admission, retirement, or death of a partner, or on a change in the profit-sharing ratio, to account for the unrecorded gain or loss resulting from the revaluation of assets and reassessment of liabilities.
92. In case of dissolution, if a partner bears realization expenses then the entry is (A) Realization A/c Dr. to Cash A/c (B) Partner’s Capital A/c Dr. to Cash A/c (C) Realization A/c Dr. to Partner’s Capital A/c (D) Cash A/c Dr. to Realization A/c
Explanation: The expense is an operating loss for the firm (Realization A/c Dr.). Since the partner pays it out of his personal funds, the firm incurs a liability to the partner (Partner’s Capital A/c Cr.).
93. The purpose of calculating Operating Ratio is to determine: (A) Profitability of business (B) Liquidity of business (C) Operational efficiency of business (D) Solvency of business
Explanation: The Operating Ratio measures the percentage of revenue consumed by operating costs (Cost of Goods Sold + Operating Expenses). A lower ratio indicates greater operational efficiency.
94. Which of the following is a non-monetary unit? (A) Currency (B) Kilometres (C) Dollars (D) Rupees
Explanation: Monetary units (like Currency, Dollars, and Rupees) are units of money. Kilometres is a unit of distance, which is a non-monetary unit.