ICSE Class 12 Accountancy — Flashcards for Quick Revision

A: Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. This is the legal definition used for partnership firms

A: Partnership is the relation existing between persons competent to make contracts, who agree to carry on a lawful business in common with a view to private gain. This definition highlights contract, la

A: The essential features are: at least two persons, agreement, lawful business with profit motive, sharing of profits, relation of principal and agent, and business carried on by all or any of them acti

A: Goodwill is the value of a firm’s reputation, connections, and customer loyalty that helps it earn higher profits than normal profits earned by other firms in the same trade. It is an intangible asset

A: Goodwill is called an intangible asset because it cannot be seen or touched, but it has real value in a profit-seeking business. It is not a fictitious asset because fictitious assets have no real val

A: Lord Eldon defined goodwill as: "Goodwill is nothing more than the probability that the old customers will resort to the old place." This means customer loyalty and repeat business are a major part of

A: Reconstitution happens when the partnership agreement changes and the firm continues with a new arrangement. The old agreement ends and a new agreement comes into operation. A change in profit sharing

A: Admission of a new partner changes the rights and duties of the existing partners. The old partnership agreement ends, a fresh agreement begins, and the firm continues in a new form. That is why admis

A: A person cannot be admitted as a partner into a firm without the consent of all existing partners, subject to any contract between them. The partnership law also states that a newly admitted partner i