Explore topic-wise InterviewSolutions in Current Affairs.

a. No, I don’t think that company should follow sales manager’s suggestion and start direct business with retailers, because it is the wholesalers who have put in all the effort to establish sales network and prepared a market for new product. The company has though verbally promised wholesalers the exclusivity to sell, so it may not send good signals about the company in the market. The wholesalers may sell the competitors’ product more aggressively, which may affect the company’s sales adversely.

b. Values ignored are:

1. Mutual trust 

2. Integrity 

3. Importance to relationships

1. Buying : A retailer buys a wide variety of goods from different wholesalers after estimating customer’s demand.

2. Storage : A retailer maintains a ready stock of goods and displays them in the shop. 

3. Selling : The retailer sells the goods in small quantities according to the demand taste and preference of consumers. 

4. Grading and Packing : The retailer grades the goods which are not graded by manufacturers and wholesalers. 

5. Risk – bearing : A retailer always keeps stock of goods in anticipation of demand and bears the risk of loss due to fire, theft, spoilage, price fluctuations, etc. 

6. Transportation : Retailers often carry goods from manufacturers to their retail outlets. 

7. Financing : Some retailers grant credit facilities to his customers and provide the facility of return or exchange of goods.

The factors affecting a channel of distribution are as follows:

1. Product Characteristics : Seasonal products are distributed through less layer of middlemen. Non standardized products that are made according to customer specifications may be delivered directly.

2. Market Characteristics : The size of the market for the goods is a major factor while selecting the route for distribution of products.

3. Number of Consumers : Large purchases made by few consumers require centralised distribution. 

4. Middlemen factor : Middlemen who are experienced and have produced more sales are wanted by all producers. Long channel naturally increases the cost and price of the product. 

5. Capacity of the Manufacturer : A financially strong producer may select a high technology oriented channel which will reduce cost in the long run. 

6. Cost and Time Involved in the Channel of Distribution : The channel cost should go along with the quality of service provided by middlemen. 

7. Services Required along with the Product : Machinery or equipment which need to be installed and demonstrated should be sold with shorter channel.

8. Life Cycle of the Product : An established product can select an ordinary channel. But a new product entering into the market should be carefully promoted by experienced middlemen.

1. Regular Supply of Goods : Retailers maintain a ready stock of various products of different manufacturers for sale to consumers.

2. New Products Information: The retailers provide important information about the new arrival of products through their personal.

3. Credit Facilities: Sometimes retailers provide credit facilities to their customers and enable them to increase their level of consumption. 

4. Wide Selection: Retailers generally keep stock of a variety of products of different manufacturers. 

5. Miscellaneous Services:

• Retailers provide free door delivery services to the customers.
• They provide after sale service to customers.
• They allow cash discounts on their sales.

1. Financial Assistance : Wholesalers provide financial assistance to retailers by selling goods on credit.

2. Meeting the Requirements : Due to limited capital and lack of space in his facility a retailer cannot hold large variety of products. 

3. Introduction of New Products : Wholesalers bring new products and their uses to the notice of retailers. 

4. Price Stability : Wholesalers reduce price fluctuations by adjusting supply and demand and save the retailers from loss arising from price fluctuations.

5. Economy in Transport : A wholesaler often delivers goods at the door steps of retailers and save their time and cost of transport. 

6. Regular Supply : Wholesalers keep large stock of varieties of goods and provide a regular supply of goods as per the retailer’s need.

Services to Producers or Manufacturers:

1. Economies in Large Scale 

2. Assistance in Distribution 

3. Warehousing Facility 

4. Forecasting of Demand 

5. Publicity of Goods 

6. Financial Assistance 

7. Risk – bearer 

8. Link

1. Help in Distribution Retailers relieve the manufacturers and wholesalers of the burden of collecting and executing a large number of small orders from various consumers. 

2. Market Information Retailer supply valuable information to wholesalers about changes in tastes, preferences, fashion etc. of consumers

3. Large Scale Operation The manufacturers and wholesalers are freed from the trouble of making individual sales to consumers in small quantities.

4. Help in Promotion Retailers participate in the promotional activities carried by manufacturers and wholesalers such as short time offers, coupons, free gifts, sales contests, etc.

5. Personal Attention The retailer is able to provide more personal attention to his customers than the wholesaler is, He gives special services on the spot when the articles require minor repairs.

1. Wholesalers buy goods directly from producers or manufacturers. 

2. Wholesalers buy goods in large quantities and sell in relatively smaller quantities.

3. Wholesalers sell different varieties of a particular variety of product.

Correct Answer is: (c) 6000°C

Correct Answer is: (c) In July

(a) 1°C at 165 meters

The sun is a very hot gaseous body, from which, continuous radiation of energy is emitted.

The heat budget refers to the heat received by the Earth and the atmosphere and the balance of heat loss in return.

The temperature is controlled by the movement of winds. In those areas where the hot winds blow, the temperature becomes high, whereas the temperature is less in those areas where cold winds blow.

The envelope of thousands of kilometers of the atmospheric layers protects our Earth from the fierce rays of the sun and from its intense heat.

Sun is the main source of atmospheric heating.

(a) on the equator

Correct option is: (d) Food web

The climax community remains stable as long as the environment remains unchanged.

1. Climax community is the community which is near equilibrium with the environment. 

2. The sequential changes in the structure and composition of the community, to adjust with the changing environment is called a climax community.

Correct answer is (b) sere

Correct Answer is: (b) Sun

Correct option is: (d) Heat

Correct answer is (b) climax community

(a) Agreement

The correct answer is : (c) firm

Correct answer is (b) microconsumers

Goodwill acquired by making payment in cash or kind is called acquired or purchased goodwill. When a firm purchases an existing business, the price paid for the purchase of such a business may exceed the net assets (Assets – Liabilities) of the business acquired.

Goodwill is the good name or reputation of the business which brings benefits to the business. It enables the business to earn more profit. It is the present value of a firm’s future excess earnings.

Gaining ratio is calculated as the difference between the new ratio and old ratio. The formula for calculation of gaining ratio is as follows:

Gaining Ratio = New Ratio – Old Ratio

Gaining ratio is the ratio in which the continuing partners acquire the deceased partner’s share. It is calculated on the eve of retirement or death of a partner for adjusting the retiring or deceased partner’s share of goodwill. The formula for calculation of gaining ratio is as follows:

Gaining Ratio = New Ratio – Old Ratio

(d) Rs. 30,000

The following are a few reasons for which a new partner is admitted to a partnership firm:

1. For additional capital amount

2. For endowment of knowledge and skills possessed by him/her

3. To enhance a firm’s future growth prospects and progress

4. To compete with the other firms

5. To replace the outgoing partner at the time of retirement and death of a partner.

Lump-sum method

Explanation: The method under which the amount payable to a retiring partner is paid off at a time is termed as Lump-sum method. Under this method, nothing is to be transferred to his loan account, as the payment is made in one single instalment and accordingly, no interest is to be paid to him.

i. (b) Capital

ii. (c) Gain

iii. (d) Retiring Partner’s Capital

iv. (a) Revaluation

v. (b) All Partners’ Capital

vi. (a) Assets

Credit balance

Explanation: The capital account of a retiring partner always shows credit balance. This is because the amount due to him in the form of share in profits of revaluation account, share of goodwill, accumulated profits and reserves, etc. is always more than the amount which decreases his claim such as drawings, share in accumulated losses, etc.

i. (a) 5 : 2

ii. (b) Goodwill

iii. (b) credited

iv. (b) goodwill

v. (b) 3 : 1

X, Y, and Z are partners sharing profits in the ratio of 5:3:2. If Y retires, then the new ratio will be 5:2.

Explanation: The new profit sharing ratio between X and Z can be calculated by simply striking out the share of the retiring partner, i.e. Y. In the given question, Y retires. So, his share will be taken out and the remaining partners will share future profits or losses in the ratio of 5:2.

Sacrificing ratio is the ratio in which the existing partners sacrifice their share of profit in favour of the incoming partner. Algebraically, it is expressed as:

Sacrifice ratio = Old ratio – New ratio

The profit or loss from revaluation on retirement of a partner is shared by all the partners.

Explanation: Revaluation profit arising on retirement of a partner is shared by all the partners in their old profit sharing ratio (including the retiring partner).

Sacrificing ratio needs to be calculated at the time of admission of a new partner. It is done to determine the amount of compensation that is to be paid by the new partner to the old partners in exchange for the sacrifice of profit share made by them.

(a) Rs. 36,000 

Profit on revaluation

Explanation: Excess of credit side over debit side of Revaluation Account is regarded as profit on revaluation. This profit is transferred to All Partners’ Capital Accounts in their old profit-sharing ratio (including the deceased partner).

True

Explanation: The credit balance in the Revaluation Account represents the losses on revaluation of assets and liabilities. Such losses occur when the decrease in the value of assets and increase in the value of liabilities is more than the increase in the value of assets and decrease in the value of liabilities.

Revaluation or Profit and Loss Adjustment Account

Explanation: The account which shows change in the values of assets is called Revaluation or Profit and Loss Adjustment Account. This account is opened to record the changes in the values of assets and liabilities, so that the new partner is not put to any advantage or disadvantage.

The proportion in which old partners make a sacrifice is called sacrifice ratio.

Explanation: The proportion in which old partners make a sacrifice is called sacrifice ratio. It is the amount that is foregone by all the old partners equally or by some of the partners in the agreed share.

Profit on Revaluation Account

Explanation: Credit balance in Revaluation Account is termed as profit on revaluation. Such profits are to be transferred to the capital accounts of old (or existing) partners in their old profit sharing ratio.

Ratio of Sacrifice

Explanation: The proportion in which the old partners make a sacrifice is regarded as the ratio of sacrifice. It is the amount that is foregone by all the old partners equally or by some of the partners in the agreed share.

Surplus Capital

Explanation: Excess of actual capital over proportionate capital is regarded as surplus capital. This surplus capital is either transferred to the current accounts or can be withdrawn by the old partners as per the terms of the partnership agreement.