There are some mistakes which are done by many students even if most of them are prepared for the examination. Some mistakes are due to lack of concentration while doing the paper, some are due to lack of proper revision and some are due to lack of clarity of the topic. Whatever may be the reason, performance can be improved a lot if following points are taken care of:

• There is difference between 7% and 7% p.a.(per annum)
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• If the words like ‘irrespective of months’ or ‘average period’ have been used, number of months/days will be ignored.
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• In the absence of provision in the partnership deed it is the rate of Interest on Loan which is 6% p.a. and not the Interest on Capital.
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• Interest on Loan and Loan are never entered in the partners’ capital accounts or current accounts but in separate partner’s loan account.
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• There is difference between charge against profit and appropriation of profit.
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• There is difference between Profit and Loss Account and Profit and Loss Appropriation Account.
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• Unless otherwise stated, fluctuating capital accounts of partners are to be prepared.
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• When date of drawings is not given, Interest on Drawings should be calculated for 6 months.
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• Short cut methods involving use of average time period for calculating Interest on Drawings are applied when the drawings are of equal amount made at equal intervals.
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• There is difference between Profit and Loss Appropriation Account and Profit and Loss Adjustment Account. (Profit and Loss Adjustment Account is the other name of Revaluation Account.
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• Always check if capitals are Fixed or Fluctuating as in case of Fixed capital, entry has to be passed using Partner’s Current Account.
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• Burden of guarantee is borne by the partners giving the guarantee.
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• There is difference between goodwill withdrawn and goodwill written off.
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• While using the formula for calculating sacrifice ratio if you get the answer in negative it means the partner is gaining, while using the formula for calculation of gaining ratio you get the answer in negative it means the partner is losing or sacrificing. Negative sacrifice is gain and negative gain is sacrifice.
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• While calculating value of Goodwill Abnormal Losses are added to profit and Abnormal Profits are deducted.
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• While calculating sacrifice ratio check the words ‘of’ and ‘from’.
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• In case of past adjustment questions check whether the capitals are fixed or fluctuating, for passing the journal entry.
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• Premium word is to be used for goodwill only if it is brought in cash or in kind.
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• Premium word in case of goodwill is different from the Securities premium used in case of share capital and debentures.
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• In case of premium for goodwill paid privately by the new partner there will be no accounting treatment in the books of partnership.
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• There is difference between discount on issue of debentures and loss on issue of debentures. All discount on issue is loss but all loss on issue is not discount on issue.
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• There is difference between securities premium account and premium on redemption of debentures account.
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• When bank account is to be prepared in case of share capital topic, there is no need of passing bank related journal entries.
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• Debenture redemption reserve account is not required in case of fully convertible debentures.
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• Interest on own debentures is not paid in cash/bank, only accounting entry is to be shown.
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• At the time of forfeiture of shares, Securities premium reserve account should be debited (to be cancelled) only if the premium has been called but not received.
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• In case of forfeiture of shares allotted on pro-rata basis shares applied/ shares allotted must be considered properly while preparing working notes.
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• In the absence of information about paid up value for reissue of forfeited shares, called up value at the time of forfeiture is taken as paid up value i.e. the amount to be credited to share capital account on reissue.
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• There is difference between the use of own debentures account and Investment in own debentures account.
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• % of discount/premium must be calculated on 10/100/500 etc. with care.
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• ₹/number of shares/debentures issued or redeemed must be seen properly.
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• In case of reissue of forfeited shares, forfeiture account should be sent to the capital reserve only for the reissued shares.

Quick Tips for Calculations