# CIE Accounting Paper-2: Specimen Questions with Answers 4 - 7 of 103

## Passage

M, N & O are partners sharing profit & loss in the ratio of 7: 5: 4. On April 1st 2014 they decide to change this sharing ratio to 3: 2: 1

## Question number: 4 (4 of 5 Based on Passage) Show Passage

Essay Question▾

### Describe in Detail

State two reasons for bringing about a change in the profit sharing ratio

### Explanation

Two reasons for changing the profit sharing ratio are

(i) Admission of a new partner

(ii) Retirement of an old partner

## Question number: 5 (5 of 5 Based on Passage) Show Passage

Essay Question▾

### Describe in Detail

Explain the term sacrificing ratio.

### Explanation

The ratio in which one or more partner surrenders their share of profit to another partner is called as sacrificing ratio. This is obtained by the formula

It reduces the share of the existing partner.

## Passage

Mr. Tendulkar’s trial balance showed a suspense A/C of £ 32600 on the debit side. On rechecking the books, the following errors were discovered:

(i) An amount of £ 10000 received from Mr. Ganguly was posted to the debit side of Mr. Ashwin as £ 12000.

(ii) Salary paid to driver £4000 was debited to his personal A/C as £2400

(iii) Drawings of £2000 was credited to sales A/C as £3200

(iv) An amount of £6000 accounting for depreciation on car was posted as £600

(v) Sale of an old bat £20000 was credited to sales A/C as £12000

## Question number: 6 (1 of 5 Based on Passage) Show Passage

Essay Question▾

### Describe in Detail

What are the types of errors that usually occur in accounting?

### Explanation

The errors can be classified into 4 types

• Error of Commission
• Error of omission
• Error of complete omission
• Error of partial omission
• Error of Principle
• Compensating Errors

## Question number: 7 (2 of 5 Based on Passage) Show Passage

Essay Question▾

### Describe in Detail

Does Mr. Tendulkar’s Trial balance tally after rectifying the above said errors If not what is done with the balance of suspense A/C?

### Explanation

No, Mr. Tendulkar’s trial balance does not tally even after the rectification of the discovered errors. There still exists a debit balance in the suspense A/C of £ 20400. This is because not all the errors have been detected. This debit amount will be carried forward to the next year and will be eliminated as and when other errors are identified.

 Date Particulars J. F Amount £ Date Particulars J. F Amount £ To Ashwin A/C 2000 By Balance B/D 32600 To Car A/C 5400 By Sales A/C 3200 To Sales A/C 8000 To Balance C/D 20400 35800 35800 By Balance B/D 20400