A was paid Rs 96,000 according to the old profit-sharing ratio but under the correct calculation he should have received only Rs 84,000. In the adjustment, what will be the treatment of A's account?

Correct answer: Debit Rs 12000

A was paid Rs 96,000 but should have received Rs 84,000, so he has received an excess of Rs 12,000 (96,000 − 84,000 = 12,000). To correct this, A’s account must be debited by Rs 12,000 to reverse the excess payment. The nearest distractor (Credit Rs 12,000) is wrong because crediting A would increase his balance instead of reducing the excess; “No effect” is incorrect because an adjustment is required. Exam tip: compute received minus entitled for each partner — debit the partner who received excess, credit those who were short.