# MCQs For NCERT Class 12 Accountancy Chapter 3 Reconstitution Of A Partnership Firm Admission Of A Partner

Please refer to the MCQ Questions for Class 12 Accountancy Chapter 3 Reconstitution Of A Partnership Firm Admission Of A Partner with Answers. The following Reconstitution Of A Partnership Firm Admission Of A Partner Class 12 Accountancy MCQ Questions has been designed based on the latest syllabus and examination pattern for Class 12. Our experts have designed MCQ Questions for Class 12 Accountancy with Answers for all chapters in your NCERT Class 12 Accountancy book.

## Reconstitution Of A Partnership Firm Admission Of A Partner Class 12 MCQ Questions with Answers

See below Reconstitution Of A Partnership Firm Admission Of A Partner Class 12 Accountancy MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question. Sacrificing ratio is used to distribute —————— in case of admission of a partner.
(a) Goodwill
(b) Revaluation Profit or Loss
(c) Profit and Loss Account (Credit Balance)
(d) Both b and c

A

Question.Yash and Manan are partners sharing profits in the ratio of2:1. They admit Kushagra into partnership for 25% share of profit. Kushagra acquired the share from old partners in the ratio of 3:2. The new profit sharing ratio will be:
(a) 14:31:15
(b) 3:2:1
(c) 31:14:15
(d) 2:3:1

C

Question.Which of the following is not the reconstitution of partnership?
(b) Dissolution of Partnership
(c) Change in Profit Sharing Ratio
(d) Retirement of a partner

B

Question.Himanshu and Naman share profits & losses equally. Their capitals were Rs.1,20,000 and Rs. 80,000 respectively. There was also a balance of Rs. 60,000 in General reserve and revaluation gain amounted to Rs. 15,000. They admit friend Ashish with 1/5 share. Ashish brings Rs.90,000 as capital. Calculate the amount of goodwill of the firm.
(a) 1,00,000
(b) 85,000
(c) 20,000
(d) None of the above

B

Question.On the admission of a new partner:
(a) Old partnership is dissolved
(b) Both old partnership and firm are dissolved
(c) Old firm is dissolved
(d) None of the above

A

Question. A and B are partners sharing profit and losses in ratio of 5:3. C is admitted for 1/4th share. On the date of reconstitution, the debtors stood at Rs 40,000, bill receivable stood at Rs. 10,000 and the provision for doubtful debts appeared at Rs. 4000. A bill receivable, of Rs 10,000 which was discounted from the bank, earlier has been reported to be dishonored. The firm has sold, the debtor so arising to a debt collection agency at a loss of 40%. If bad debts now have arisen for Rs 6,000 and firm decides to maintain provisions at same rate as before then amount of Provision to be debited to Revaluation Account would be:
(a) Rs 4,400
(b) Rs 4,000
(c) Rs 3,400
(d) None of the above

C

Question.Which of the following is not true with respect to Admission of a partner?
(a) A new partner can be admitted if it is agreed in the partnership deed.
(b) If all the partners agree, a new partner can be admitted.
(c) A new partner has to bring relatively higher capital as compared to the existing partners
(d) A new partner gets right in the assets of the firm

C

Question.If at the time of admission if there is some unrecorded liability, it will be ————- to — ———— Account.
(a) Debited, Revaluation
(b) Credited, Revaluation
(c) Debited, Goodwill
(d) Credited, Partners’ Capital

A

Question.A, and B are partners sharing profits in the ratio of 2:3. Their balance sheet shows machinery at ₹2,00,000; stock ₹80,000, and debtors at ₹1,60,000. C is admitted and the new profit sharing ratio is 6:9:5. Machinery is revalued at ₹1,40,000 and a provision is made for doubtful debts @5%. A’s share in loss on revaluation amount to ₹20,000. Revalued value of stock will be:
(a) ₹62,000
(b) ₹1,00,000
(c) ₹60,000
(d) ₹98,000

C

Question.Revaluation Account is a ———— Account.
(a )Real
(b) Nominal
(c) Personal
(d) Liability

B

Question.Heena and Sudha share Profit & Loss equally. Their capitals were Rs.1,20,000 and Rs. 80,000 respectively. There was also a balance of Rs. 60,000 in General reserve and revaluation gain amounted to Rs. 15,000. They admit friend Teena with 1/5 share. Teena brings Rs.90,000 as capital. Calculate the amount of goodwill of the firm.
(a) 85,000
(b) 1,00,000
(c) 20,000
(d) None of the above

A

Question.At the time of admission of a partner, Employees Provident Fund is:
(a) Distributed to partners in the old profit sharing ratio
(b) Distributed to partners in the new profit sharing ratio
(d) None of the above

D

Question.Sacrificing ratio is calculated because:
(a) Profit shown by Revaluation Account can be credited to sacrificing partners
(b) Goodwill brought in by the incoming partner can be credited to the new partner
(c) Goodwill brought in by the incoming partner can be credited to the sacrificing partners
(d) Both a and c

C

Question. At the time of admission of a new partner, the balance of Workmen Compensation Reserve will be transferred to:
(a) Old partners in the old profit sharing ratio
(b) Sacrificing partners in the sacrificing ratio
(c) Revaluation Account
(d) All partners in the new profit sharing ratio

A

Question.As per ———, only purchased goodwill can be shown in the Balance Sheet.
(a) AS 37
(b) AS 26
(c) Section 37
(d) AS 37

B

Question.The firm of P, Q and R with profit sharing ratio of 6:3:1, had the balance in General Reserve Account amounting Rs. 1,80,000. S joined as a new partner and the new profit sharing ratio was decided to be 3:3:3:1. Partners decide to keep the General Reserve unchanged in the books of accounts. The effect will be:
(a) P will be credited by Rs. 54,000
(b) P will be debited by Rs. 54,000
(c) P will be credited by Rs. 36.000
(d) P will be credited by Rs. 36,000

A

Question.Aryaman and Bholu are partners sharing profit and losses in ratio of 5:3. Chirag is admitted for 1/4th share. On the date of reconstitution, the debtors stood at Rs 40,000, bill receivable stood at Rs. 10,000 and the provision for doubtful debts appeared at Rs. 4000. A bill receivable, of Rs 10,000 which was discounted from the bank, earlier has been reported to be dishonored. The firm has sold, the debtor so arising to a debt collection agency at a loss of 40%. If bad debts now have arisen for Rs 6,000 and firm decides to maintain provisions at same rate as before then amount of Provision to be debited to Revaluation Account would be:
(a) Rs 4,400
(b) Rs 4,000
(c) 3,400
(d) None of the above

C

Question. Ram, Sita and Laxman were equal partners. They decided to change the profit sharing ratio to4 : 3 : 2. For this purpose the goodwill of the firm was valued at ` 90,000.The journal entry for the treatment of Goodwill on change in profit sharing ratio will be:

B

Question.Jeetu and Vijay are partners in a firm sharing profits in the ratio of 3 : 2. An extract of their Balance Sheetis as follows:If half of the investments are taken over by Jeetu and Vijay in their profit sharing Ratio at book value,what amount of investment will be shown in the revised Balance Sheet?

(a) `75,000
(b) `35,000
(c) `95,000
(d) `20,000

D

Question.Sacrificing ratio of a partner is computed as:
(a) Old Ratio – New Ratio
(b) New Ratio – Old Ratio
(c) Old Ratio – Gaining Ratio
(d) None of the above

A

Question.Any change in the relationship of existing partners which results in an end of the existing agreementand enforces making of a new agreement is called:
(a) Revaluation of Partnership
(b) Reconstitution of Partnership
(c) Realisation of Partnership
(d) None of the above

B

Question.A, B, C and D are partners sharing their profits and losses equally. They change their profit sharingratio to 2 : 2 : 1 : 1. How much will C sacrifice:
(a) 1/6
(b) 1/12
(c) 1/24
(d) 1/2

B

Question.Utkarsh and Abhishek are partners sharing profit and loss in the ratio of 3 : 2. Their Balance Sheetshowed a balance of ` 1,00,000 in the Reserve and a debit balance of `20,000 in Profit and Loss Account.They have now decided to share the future profits equally. Instead of closing the Profit and Loss Accountand Reserve, it is decided to pass an adjustment entry for the same. The adjustment entry
(a) Dr. Utkarsh by `16,000; Dr. Abhishek by `16,000
(b) Cr. Utkarsh by `8,000; Dr. Abhishek by `8,000
(c) Dr. Abhishek by `5,000; Cr. Utkarsh by `5,000
(d) Dr. Utkarsh by `9,000; Cr. Abhishek by `9,000

B

Question.A and B were partners in a firm sharing profit or loss in the ratio of 3 : 1. With effect from April 1, 2021they agreed to share profit or loss in the ratio of 2 : 1. Due to change in profit sharing ratio, B’s gain orsacrifice will be :
(a) Gain 1/12
(b) Sacrifice 1/12
(c) Gain 1/3
(d) Sacrifice 1/3

A

Question. A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. They decided to share future profits in theratio of 2 : 3 : 5. What will be the accounting treatment of Workmen Compensation Reserve appearingin the Balance Sheet on that date when no other information is available for the same?
(a) Distributed among partners in their capital ratio.
(b) Distributed among partners in their new profit-sharing ratio.
(c) Distributed among partners in their old profit-sharing ratio.
(d) Carried forward to new Balance Sheet.

C

Question.Capital employed in a business is `2,00,000. The normal rate of return on capital employed is 15%. During2021, the firm earned a profit of `48,000. The company calculates goodwill on basis of 3 year’s purchase ofsuper profit. On the basis of information, match the following.

(a) (A)—(i), (B)—(iii), (C)—(iv), (D)—(ii)
(b) (A)—(i), (B)—(ii), (C)—(iii), (D)—(iv)
(c) (A)—(iv), (B)—(iii), (C)—(ii), (D)—(i)
(d) (A)—(iv), (B)—(i), (C)—(iii), (D)—(ii)

C

Question. Out of the following which does not affect change in the Profit-sharing Ratio:
(a) Determination of Sacrificing Ratio and Gaining Ratio
(b) Accounting of Goodwill
(c) Accounting of Reserves, Accumulated Profits and Losses
(d) Dissolution of Partnership Firm

D

Question. Assets are revalued and liabilities are reassessed at the time of change in profit-sharing ratio so that:
(a) Assets and liabilities are shown at their present values.
(b) Gaining partner is not put to an advantage and sacrificing partner is not put to disadvantage and viceversa.
(c) Both (a) and (b)
(d) None of the above

B

Question.Choose the correct order to match the following with their explanations:

(a) I—(C); II—(B); III—(A)
(b) I—(C); II—(A); III—(B)
(c) I—(A); II—(B); III—(C)
(d) I—(B); II—(A); III—(C)

B

Question.At the time of change in profit-sharing ratio, sacrificing ratio is determined so that
(a) Assets and liabilities are shown at their present values.
(b) Gaining partner is not put to an advantage and sacrificing partner is not put to disadvantage and viceversa.
(c) Gaining partner can compensate the sacrificing partner for the sacrifice of profit share.
(d) Assets and liabilities are shown at their current estimated values.

C

Question. X, Y and Z are partners sharing profits and losses in the ratio of 5 : 4 : 1. Calculate sacrificing or gainingshare for each if Z acquires 1/10th share of X and 1/2nd share of Y.
(a) X’s Sacrifice = 5/100,       Y’s Gain = 20/100 ,       Z’s Sacrifice = 25/100
(b) X’s Sacrifice = 5/100,      Y’s Sacrifice = 20/100,        Z’s Gain = 25/100
(c) X’s Sacrifice = 5/100,        Y’s Gains = 20/100,         Z’s Sacrifice = 25/100
(d) None of the above

B

Question.Reserves are distributed in old partners in ……….. ratio.
(a) Old
(b) Gaining
(c) New
(d) Sacrificing

A

Question.Which statement is true with respect to AS-26?
(a) Purchased goodwill can be shown in the Balance Sheet
(b) Revalued goodwill can be shown in the Balance Sheet
(c) Both purchased goodwill and revalued can be shown in the Balance Sheet
(d) None of the above

A

Question.Match the following:

(a) i- B, ii-C, iii-A, iv-D
(b) i- D, ii-B, iii-A, iv-C
(c) i- D, ii-C, iii-A, iv-B
(d) i- D, ii-C, iii-B, iv-A

C

(a) Credited to sacrificing partners
(b) Credited to all partners in the new profit sharing ratio
(c) Credited to old partners in the old profit sharing ratio
(d) Credited to only gaining partners

A

Question.Match the following with respect to journal entries for treatment of goodwill.

(a) i- B, ii-C, iii-A, iv-D
(b) i- C, ii-D, iii-A, iv-B
(c) i- D, ii-C, iii-A, iv-B
(d) i- D, ii-C, iii-B, iv-A

B

Question. Calculate the value of goodwill at 3 years’ purchase when: Capital employed 2,50,000; Average profit Rs. 30,000 and normal rate of return is I0%.
(a) Rs. 3000
(b) Rs. 25,000
(c) Rs. 30,000
(d) Rs. 5,000

D

Question.Weighted average profit method of calculating goodwill is used when:
(a) Profits are not equal
(b) Profits show a trend
(c) Profits are fluctuating
(d)None of the above

B

Question.The net assets of the firm including fictitious assets of 5,000 are 85,000.The net liabilities of the firm are 30,000.The normal rate of return is 10% and the average profits of the firm are 8,000.Calculate the goodwill as per capitalization of super profits.
(a) Rs.20,000
(b) Rs. 30,000
(c) Rs. 25,000
(d) None of the above

B

Question.Goodwill is _____
(a) tangible asset
(b) intangible asset
(c) fictitious asset
(d) both (b) & (c)

B

Question.What are super profits
(a) Actual profit – Normal Profit
(b) Normal Profit – Actual profit
(c) Actual profit + Normal Profit
(d)None of the above

A

Question.Which of the following items are added to previous year’s profits for finding normal profits for valuation of goodwill.?
(a) Loss on sale of fixed assets
(b) Loss due to fire, earthquake etc
(c) Undervaluation of closing stock
(d) All of the above

D

Question.Goodwill of the firm on the basis of 2 years’ purchase of average profit of the last 3 years is Rs. 25,000. Find average  profit.
(a) Rs. 50,000
(b) Rs. 25,000
(c) Rs. 10,000
(d)  Rs. 2500

D

Question.Following are the methods of calculating goodwill except:
(a) Super profit method
(b) Average profit method
(c) Weighted Average profit method
(d) Capital profit method

D

Question.Capital invested in a firm is 5,00,000.Normal rate of return is 10% .Average profit of the firm are 64,000(after an abnormal loss of 4,000).Value of goodwill at four times the super profits will be:
(a) Rs.72,000
(b) Rs. 40,000
(c) Rs. 2,40,000
(d) 1,80,000

A

Question: A and B share profits and losses equally. They have Rs.20,000 each as capital. They admit C as equal partner and goodwill was valued at Rs.30,000. C is to bring in Rs.30,000 as his capital and necessary cash towards his share of goodwill. Goodwill Account will not remain open in books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounts.
(a) Rs.31,500; Rs.31,500; Rs.30,000
(b) Rs.31,500; Rs.31,500; Rs.20,000
(c) Rs.26,500; Rs.26,500; Rs.30,000
(d) Rs.20,000; Rs.20,000; Rs.30,000

A

Question: In the absence of an express agreement as to who will contribute to new partners’ share of profit, it is implied that the old partners will contribute :
(a) Equally
(b) In the ratio of their capitals
(c) In their old profit-sharing ratio
(d) In the gaining ratio

C

Question: A and B are partners sharing profit in the ratio of 3 : 2. They admit C as a partner by giving him 1/3 share in future profits. The new ratio will be :
(a) 12: 8:5
(b) 8: 12 : 5
(c) 5:5:12
(d) None of the Above

D

Question: X and Y are partners sharing profit in the ratio of 3 : 2. Z was admitted with 1/4 share in profits which he acquires equally from X and Y. The new ratio will be:
(a) 9:6: 5
(b) 19: 11: 10
(c) 3 : 3 : 2
(d) 3 : 2 : 4

B

Question: When the new partner brings cash for goodwill, the amount is credited to
(a) Revaluation Account.
(b) Cash Account.
(d) Realisation Account.

C

Question: At the time of admission, if the profit-sharing ratio among the old partners does not change then sacrificing ratio will be
(a) equal.
(b) according to the contribution of capital.
(c) their old profit-sharing ratio.
(d) according to new partner.

C

Question: A and B share profits in the ratio of 2 : 1. C is admitted with 1/4 share in profits. C acquires 3/4 of his share from A and 1/4 of his share from B. The new ratio will be:
(a) 2 : 1 : 1
(b) 23 : 13 : 12
(c) 3:1:1
(d) 13 : 23 : 12

B

Question: In case of admission of a partner, the entry for unrecorded investments will be:
(a) Debit Partners Capital A/cs and Credit Investments A/c
(b) Debit Revaluation A/c and Credit Investment A/c
(c) Debit Investment A/c and Credit Revaluation A/c
(d) None of the above

C

Question: Partners A, B and C share the profits of a business in the ratio of 3 : 2 : 1 respectively. They admit D who brings in Rs.60,000 for his share of goodwill. A, B, C and D decide to share the profits respectively in the ratio of 5 : 3 : 2 : 2. Credit will be given to :
(a) A Rs. 6,000; B Rs.6,000
(b) A Rs.30,000; B Rs. 18,000; C Rs. 12,000
(c) A Rs.30,000; B Rs.20,000; C Rs. 10,000
(d) A Rs.30,000; B Rs.30,000

D

Question: A new partner may be admitted into a partnership ;
(a) With the consent of any one partner
(b) With the consent of majority of partners
(c) With the consent of all old partners
(d) With the consent of 2/3rd of old partners

C

Question: On the admission of a new partner :
(a) Old firm is dissolved .
(b) Old partnership is dissolved
(c) Both old partnership and firm are dissolved
(d) Neither partnership nor firm is dissolved

C

Question: B and N are partners in a firm sharing profits in the ratio of 3 : 2. They admit S as a partner for l/4th share in the profits. S acquires his share from B and N in the ratio of 2 : 1. The new profit-sharing ratio will be :
(a) 2:1:4
(b) 19: 26: 15
(c) 3:2:4
(d) 26: 19: 15

D

Question: Unrecorded assets or liabilities are transferred to
(a) Partners’ Capital Accounts.
(b) Revaluation Account.
(c) Profit and Loss Account.
(d) Partners’ Current Accounts.

B

Question: X and Y are partners sharing profits in the ratio of 3: 2, and capitals as Rs. 100,000 and Rs. 50,000 respectively. Z is admitted for 1/5th share in profits. The amount Z will contribute as capital will be
(a) Rs. 50,000.
(b) Rs. 35,000.
(c) Rs. 37,500.
(d) Rs. 60,000.

C

Question: A and B are partners of a partnership firm sharing profits in the ratio of 3 : 2 respectively. C was admitted for l/5th share of profit. Machinery would be appreciated by 10% (book value Rs. 80,000) and building would be depreciated by 20% (Rs.2,00,000). Unrecorded debtors of Rs. 1,250 would be brought into books now and a creditor Amounting to Rs.2,750 died and need not pay anything on this account. What will be profit/loss on revaluation?
(a) Loss Rs.28,000
(b) Loss Rs. 40,000
(c) Profits Rs.28,000
(d) Profits Rs.40,000

A

Question: X and Y are partners sharing profits and losses in the ratio of 3:2. Z was admitted for the 1/5th share and for this he brings Rs. 150,000, as capital. If capitals are to be proportionate to profit-sharing ratio, the respective capitals of the partners will be
(a) Rs. 3,00,000: Rs. 3,00,000: Rs.1,50,000.
(b) Rs. 3,60,000: Rs. 2,40,000: Rs. 1,50,000.
(c) Rs. 1,50,000: Rs.’ 1,50,000: Rs. 1,50,000.
(d) Rs. 1,50,000: Rs. 2,00,000: Rs. 4,00,000.

B

Question: Revaluation Account or Profit and Loss Adjustment A/c is a
(a) Real Account
(b) Personal Account
(c) Nominal Account
(d) Asset Account

C

Question.Under which method of valuation of goodwill, normal rate of return is not considered?
(a)Loss on sale of fixed assets
(b) Loss due to fire, earthquake etc
(c) Undervaluation of closing stock
(d) All of the above

C

Question: A and B share profits in the ratio of 3 : 2. They agreed to admit C on the condition that A will sacrifice —th of his share of profit in favour of C and B will sacrifice yrth of his profits in favour of C. The new profit sharing ratio will be :
(a) 12 : 9 : 4
(b) 3 : 2 : 4
(c) 66:48: 11
(d) 48: 66: 11

C

Q. 9. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is admitted. A surrenders 1/15th share of his profit in favour of C and B surrenders 2/15th of his share in favour of C. The new ratio will be :
(a) 8 : 4 : 3
(b) 42 : 26 : 7
(c) 4 : 8 : 3
(d) 26 : 42 : 7

B

Question: A and B are partners sharing profits and losses as 2 : 1. C is admitted and profit sharing ratio becomes 4:3:2. Goodwill is valued at Rs.94,500. C brings required goodwill in cash. Goodwill amount will be Credited to :
(a) A 114,000 and B Rs. 7,000
(b) A Rs. 12,000 and B Rs. 9,000
(c) A Rs.21,000
(d) A Rs.94,500

C

Question: The interest on capital account of partners under the fluctuating capital account method credited to
(a) Partners capital account
(b) Interest account
(c) Profit & Loss A/c
(d) None of the options

A

Question: In the absence of agreement to the contrary , partners share profit and losses in the
(a) Rate of average capital
(b) 0.25
(c) None of the options
(d) Equal ratio

D

Question: X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z into partnership with |th share in profits which he acquires equally from X and Y. Z brings in Rs.40,000 as goodwill in cash. Goodwill amount will be credited to :
(a) X Rs.20,000; Y Rs.20,000
(b) X Rs.25,000; Y Rs.15,000
(c) X Rs.24,000; Y Rs. 16,000
(d) X Rs. 4,000; Y Rs. 4,000

A

Question: A and B are partners sharing profits in the ratio of 3 : 2. They admit C into the partnership with 1/4th share in future profits. The new profit sharing ratio is 5 : 4 : 3. The firm’s goodwill on C’s admission was valued at Rs. 1,44,000. But C could not bring any amount for goodwill in Cash. Credit will be given to :
(a) A Rs. 80,000; B Rs.64,000
(b) A Rs. 20,000; B Rs. 16,000
(c) A Rs. 1,05,600; B Rs.38,400
(d) A Rs. 26,400; B Rs. 9,600

D

Question: A and B are sharing profits and losses in the ratio of 3: 2. They admit C as a partner and give him 2/10th share in the profits. The new profit-sharing ratio will be
(a) 12:8:5.
(b) 3:2:2.
(c) 3:2:5.
(d) 2:1:2.

A

Question: A and B are sharing profits and losses in the ratio of 5: 3. They admit C as a partner and give him 3/10th share of the profits. This share he will get 1 /5th from A and 1/10th from B. The new profit-sharing ratio will be
(a) 5:6:3.
(b) 2:4:6.
(c) 17:11:12.
(d) 18:24:38.

C

Question: Profit or Loss on revaluation of assets and reassessment of liabilities is transferred to Partners’ Capital Accounts in their
(a) Capital Ratio.
(b) Equal Ratio.
(c) Old Profit-sharing Ratio.
(d) Gaining Ratio.

C

Question: Goodwill of a firm of A and B is valued at Rs.30,000. It is appearing in the books at Rs. 12,000. C is admitted for 1/4 share. What amount he is supposed to bring for goodwill?
(a) Rs.3,000
(b) Rs.4,500
(c) Rs.7,500
(d) Rs. 10,500

C

Question: 4 and 5 are partners sharing profits in the ratio of 7 : 5. C is admitted into the partnership for 1/6th share which he acquires 1/24th from A and 1/8fh from B. C does not pay anything for his share of goodwill. On C’s admission firm’s goodwill was valued at Rs. 1,80,000. Credit will be given to :
(a) A Rs. 22,500; B Rs. 7,500
(b) A Rs. 7,500; B Rs. 22,500
(c) A Rs. 45,000; B Rs. 1,35,000
(d) A Rs.1,35,000; B Rs. 45,000

B

Question: X and Y are partners in a firm sharing profits in the ratio of 5 : 3. They admitted Z as a new partner. The new profit sharing ratio will be 4 : 3 : 2. The firm’s goodwill on Z’s admission was valued at Rs. 1,26,000. But Z could not bring any amount of goodwill in Cash. Credit will be given to :
(a) X Rs. 17,500; Y Rs.10,500
(b) X Rs. 16,000; Y Rs.12,000
(c) X Rs. 22,750; Y Rs. 5,250
(d) X Rs. 1,02,375; Y Rs.23,625

C

Question: P and Q are partners in a firm having capitals of Rs. 15,000 each. R is admitted for 1/3rd share for which he has to bring Rs. 20,000 for his share of capital. The amount of goodwill will be
(a) Rs. 8,000.
(b) Rs. 10,000.
(c) Rs. 9,000.
(d) Rs. 11,000.

B

Question.When Goodwill is not purchased goodwill account can :
(a) Never be raised in the books
(b) Be raised in the books
(c) Be partially raised in the books
(d) Be raised as per the agreement of the partners

A

Question.The excess amount which the firm can get on selling its assets over and above the saleable value of its assets is called :
(a)Surplus
(b) Super profits
(c) Reserve
(d) Goodwill

D

Question.The goodwill of the firm is not affected by:
(a) Location of the firm
(b) reputation of the firm
(c) Better customer services
(d) None of the above

B

Question.The ratio in which a partner receives a rise in his share of profits is known as:
(a) New Ratio
(b) Sacrificing Ratio
(c) Capital Ratio
(d) Gaining Ratio

D

Question.Increase and decrease in the value of assets and liabilities are recorded through:
(a) Partners’ Capital Account
(b) Revaluation Account
(c) Profit and  Loss Appropriation  Ne
(d) Balance  Sheet

B

Question.Any change  in  the  relationship  of  existing  partners  which  results  in  an  end  of  the  existing agreement and enforces making of new· agreement is called:
(a) Revaluation  of partnership
(b) Reconstitution  of partnership
(c) Realisation of partnership
(d) None of the above

B

Question.Reserves and  accumulated  profits  are transferred  to  partners ‘ capital  accounts  at the  time of reconstitution  in:
(a) Old  profit-sharing  ratio
(b) Sacrificing Ratio
(c) Gaining ratio
(d) New  profit-sharing  ratio

A

Question.The ratio in which a partner surrenders his share in favour of a partner is known as:
(a)   New profit-sharing ratio
(b)   Sacrificing Rati
(c)    Gaining Ratio
(d)   Capital Ratio

B

Question.In which of the following case, revaluation accou nt is debited?
(a) Increase in value of asset
(b) Decrease in value of asset
(c) Decrease in value of liability
(d) No change in value of assets

B

Question.Partner’s capital account is credited when there is
(a) Profit on revaluation
(b) transfer of general reserve
(c) transfer of accumulated  profits
(d) All of the above

D

Question.A and B are partners in a firm sharing profits in the ratio of 3 : 2. They decided to share future profits equally. Calculate A’s gain or sacrifice
(a) 2/10 (sacrifice)
(b) 5/10 (gain)
(c) 1/10 (Gain)
(d) 1/10 (sacrifice)

D

Question.In case of change in profit-sharing ratio, the gaining partner must compensate the sacrificing partners by paying the proportional amount of
(a) capital
(b) cash
(c) goodwill
(d)   none of the above

C

Question.In which of the following cases, revaluation account is credited?
(a) Decrease  in value of liability
(b) Increase in value of liability
(c) Decrease in value of asset
(d) No change in value of liability

A

Question.Sacrificing ratio is the difference between :
(a) New ratio and old ratio
(b) Old ratio and new ratio
(c) New ratio and gaining ratio
(d) Old ratio and gaining ratio

B

Question.In case of change in profit-sharing ratio, the accumulated profits are distributed to the partners in
(a) new  ratio
(b) old ratio
(c) sacrificing ratio
(d) equal ratio

B

Question.U V and W are partners sharing profits in the ration of 2:3:5. They also decide to record the effect of the following revaluations and reassessments without affecting the book values of assets and liabilities by passing a single adjustment entry:

(a)   Dr. W and Cr. U by   10,500
(b)   Dr. U and Cr. W by Rs. 10,500
(c)    Dr. V and Cr. U by Rs. 10,500
(d)   Dr. W and Cr. V by Rs. 10,500

B

Question.R; S and T sharing profits and losses in the ratio of 1:2:3, decided to share future profit and losses equally. They also decided to adjust the following accumulated profits, losses and reserves without affecing their book figures, by passing a single adjustment entry:
General Reserve                                40000
Profit and Loss A/c                             30000
Share .Issue expenses                       10000
The necessary .adjustment entry will be
(a) R and Cr. T by < I 0,000
(a) T and Cr. R by < 10,000
(a) S and Cr. R by < 10,000
(a) R and Cr. S by < 10,000

A

Question.A,B and C were are partners in a firm sharing profits in the ratio of 3:4:1 .They decided to share profits equally w.e.f from 1 .4.2019. On that date the profit and loss account showed the credit  balance of 96,000.instead of closing the profit and loss account ,it was decided to record an adjustment entry reflecting the change in profit sharing ratio .In the journal entry:
(a) Dr. A by 4,000; Dr. B by 16,000; Cr C by 20,000
(b) Cr. A by 4,000; Cr. B by 16,000; Dr C by 20,000
(c) Cr. A by 16,000; Cr. B by 4,000; Dr C by 20,000
(d) Dr. A by 16,000; Dr. B by 4,000; Cr C by 20,000

B

Question.X,Y and Z are partners sharing profits and losses in the ratio of 5:3:2.They decide to share the future profits in the ratio of 3:2:1. Workmen compensation reserve appearing in the balance sheet on the date if no information is available for the same will be:
(a) Distributed among the partners in old profit sharing ratio
(b) Distributed among the partners in new profit sharing ratio
(c) Distributed among the partners in capital ratio
(d) Carried forward to new balance sheet without any adjustment

A

Fill in the blanks:

Question.Increase in the value of assets and decrease in the value of liabilities result in ……..for the existing partners and should be ……….to P/L Adjustment a/c

gain,credited

Question.When the value of goodwill of the firm is not given but has to be inferred on the basis of the net worth of the firm ,it is called……………..

Question. If Super profit of a firm is 10,000,its value of goodwill will be ………….if rate of return is 8%

1,25,000

Question.The value of goodwill is based on ———– judgment of the valuer .

Subjective

Question.Goodwill is not valued during ………….

Dissolution of the firm

Question.Under ———- method ,goodwill is the excess of capitalized value of business over actual capital employed.

Capitalisation of average profit

Question.When the value of goodwill of the firm is not given but has to be inferred on the basis of the net worth of the firm ,it is called……………..

Hidden goodwill

Question.……..should compensate …………..in the case of reconstitution of the firm.     partner

Gaining partner, Sacrificing

True or False

Question. A,B and C are sharing profits in the ratio of 3:2:1. They decided to share equally in future .B’s has neither sacrificed nor gained .

True

Question. A partnership is reconstituted due to change in profit sharing ratio

True

Question.“As per Section 26 of the Indian Partnership Act, 1932, a person can be admitted as a new partner if it is agreed in the Partnership Deed”. Is the statement True or False?

False

Question“A newly admitted partner cannot pay his share of the goodwill to the sacrificing partners privately”. Is the statement True or False?

False

Question. “At the time of admission, old partnership comes to an end”. Is the statement true or false?

True

Question.“Unless agreed otherwise, Sacrificing Ratio of the old partners will be the same as their Old Profit Sharing Ratio”. Is the statement True or False?

Question.“As per Section 26 of the Indian Partnership Act, 1932, a person can be admitted as a new partner if it is agreed in the Partnership Deed”. Is the statement True or False?

False

Question“A newly admitted partner cannot pay his share of the goodwill to the sacrificing partners privately”. Is the statement True or False?

False

Question. “At the time of admission, old partnership comes to an end”. Is the statement true or false?

True

Question.“Unless agreed otherwise, Sacrificing Ratio of the old partners will be the same as their Old Profit Sharing Ratio”. Is the statement True or False?

True

#### Question. Goodwill is valued during dissolution of a firm

False

Question.“Average profit method” takes into consideration the future maintainable profits.

True

Question.Self-Generated goodwill is recorded in the books of accounts as some consideration is paid for it

False

Question.Goodwill can be sold in part.

False

False

Question.Purchased goodwill may arise on acquisition of an existing business concern.