CBSE Class 12 Accountancy Admission Of A Partner MCQs Set B

Question. When is Revaluation A/c prepared?
(a) At the time of admission
(b) At the time of retirement
(c) At the time of death
(d) All of the options

Answer : D

Question. In the event of death of a partner, the amount of general reserve is transferred to partners capital accounts in
(a) The old profit sharing ratio
(b) The new profit sharing ratio
(c) the capital ratio
(d) None of the options

Answer : A

Question. All accumulated losses are transferred to the capital a/c of the partners in:
(a) New profit sharing ratio
(b) Old profit sharing ratio
(c) Capital ratio
(d) None of the options

Answer : B

Question. The partners whose share Increase as a result of change in profit sharing ratio are known as
(a) Gaining Partners
(b) Sacrificing Partners
(c) Sleeping Partners
(d) None of the options

Answer : A

Question. Himanshu and Naman share profits & losses equally. Their capitals were Rs.1,20,000 andRs. 80,000 respectively. There was also a balance of Rs. 60,000 in General reserve andrevaluation 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) Rs.1,00,000
(b) Rs. 85,000
(c) Rs.20,000
(d) None of the options

Answer : B

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 thenew profit sharing ratio is 6:9:5. Machinery is revalued at ₹1,40,000 and a provision ismade 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

Answer : B

Question. 15 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
(c) Adjusted through gaining ratio
(d) None of the options

Answer : 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

Answer : D

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

Answer : A

Question. Excess of the credit side over the debit side of revaluation account
(a) Profit
(b) Loss
(c) Gain
(d) Expense

Answer : A

Question. Balance sheet prepared after new partnership agreement, assets and liabilities are recorded at
(a) Original value
(b) At realisable value
(c) None of the options
(d) Revalued figure

Answer : D

Question. Share of goodwill brought in by new partner in cash is called
(a) Premium
(b) Profit
(c) Assets
(d) LiabilitiesAnswer:

Answer : A

Question. Profit Sharing ratio is the ration in which the partners have agreed to share
(a) Profit only
(b) Profit & Losses
(c) Losses only
(d) None of the options

Answer : B

Question. In guarantee of profit, given to a partner
(a) Minimum Guarantee profit
(b) Equal Profit
(c) 0.25
(d) None of the options

Answer : A

Question. In the partnership, every partner has the right to
(a) Consulted about the business
(b) Both
(c) Participate in management
(d) None of the options

Answer : B

Question. When the new partners pays for goodwill in cash, the amount should be debited in the firms book to
(a) Cash A/c
(b) Goodwill A/c
(c) Capital Account
(d) All of the options

Answer : A

Question. When new partner brings cash for goodwill, the amount is credited to:
(a) Realization account
(b) Cash account
(c) Premium for goodwill account
(d) Revaluation account

Answer : C

Question. If the new partner brings any additional cash other than his capital contributions then it is termed as:
(a) Capital
(b) Reserves
(c) Profits
(d) Premium for goodwill

Answer : D

Question. Profit of the firm that have not been distributed among the partners, called
(a) Accumulated Profits
(b) Average Profit
(c) Super Profit
(d) None of the options

Answer : A

Question. X and Y shares profits in the ratio of 2:3, how they decided to share profits equally in the future, Which partner will sacrifice and in which ratio
(a) None of the options
(b) X Sacrifice 1/10
(c) Both
(d) Y Sacrifice 1/10

Answer : D

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

Answer : B

Question. Revaluation A/c ( alternatively Profit & Loss Adjustment Account ) is a
(a) Nominal Account
(b) Real Account
(c) Personal Account
(d) None of the options

Answer : A

Question. If the adjustment in the values of assets at the time of the admission of a partner shows profits, the same should be credited to the capital accounts of
(a) The old partners in their old profit sharing ratio
(b) The old partners in their new profit sharing ratio
(c) All partners in their old profit sharing ratio
d) None of the options

Answer : A

Question. A and B are partners sharing profits in the ratio of 3:1. C is admitted to partnership firm for 1/4th share. The sacrificing ratio of A and B will be:
(a) Equal
(b) 2:1
(c) 3:2
(d) 3:1

Answer : D

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

Answer : A

Question. Any change in agreement of partnership is called
(a) Dissolution of partnership firm
(b) Reconstitution of partnership firm
(c) Reconstitution of partners
(d) None of the options

Answer : B

Question. Which circumstances a partnership firm may be reconstituted
(a) All of the options
(b) Admission of a partner
(c) Retirement/Death of a partner
(d) Change in Profit Sharing Ratio

Answer : A

Question. At the time of admission of a new partner, Which adjustments are required
(a) Accounting treatment of Goodwill.
(b) Accounting treatment of accumulated profit.
(c) Calculation of new profit sharing ratio and sacrificing ratio.
(d) All of the options

Answer : D

Question. Profit & loss adjustment account, which
(a) Decrease Value of Liabilities
(b) Increase value of the assets
(c) Both
(d) None of the options

Answer : C

Question. At the time of admission of a new partner, the entry for unrecorded investment will be:
(a) Dr. Investment A/c and Cr. Revaluation A/c
(b) Dr. Partners’ Capital A/c and Cr. Investment A/c
(c) Dr. Revaluation A/c and Cr. Investment A/c
(d) None of the options

Answer : A

Question. Anil and Aman are partners sharing profits and losses in the ratio of 3:2. Akhil is admitted as a new partner for 1/3rd share in the profits. Goodwill of the firm is valued at ₹60000 and goodwill already appears in the books at ₹18000. It is decided that the existing goodwill should continue to appear in the books at its old value. Akhil’s share of goodwill is:
(a) ₹26,000
(b) ₹14,000
(c) ₹20,000
(d) ₹6,000

Answer : 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 reserveandrevaluation gain amounted to Rs. 15,000. They admit friend Teena with 1/5 share. Teenabrings Rs.90,000 as capital. Calculate the amount of goodwill of the firm.
(a) Rs.85,000
(b) Rs.1,00,000
(c) Rs.20,000
(d) None of the options

Answer : C

Question. Profit or loss on revaluation is borne by
(a) New partners
(b) All partners
(c) Old Partners
(d) All of the options Answer:

Answer : C

Question. On the admission of a new partner, if goodwill account is to be raised then this should be debited to
(a) Goodwill Account
(b) Old Partners capital Account
(c) Profit & Loss Appropriation A/c
(d) None of the options

Answer : A

Question. When we use super profit Method for goodwill Valuation
(a) Firm earns higher Profit
(b) Firm earns normal Profit
(c) Average profit
(d) None of the options

Answer : A

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 options

Answer : C

Question. The firm of P, Q and R with profit sharing ratio of 6:3:1, had the balance in GeneralReserve Account amounting Rs. 1,80,000. S joined as a new partner and the new profitsharing ratio was decided to be 3:3:3:1. Partners decide to keep the General Reserveunchanged 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

Answer : A

Question. A and B are partners sharing profits and losses in the ratio of 7 : 5. They agree to admit C, their manager, into partnership who is to get l/6th share in the profits. He acquires this share as l/24th from A and l/8th from B. The new profit sharing ratio will be :
(a) 13:7:4
(b) 7 : 13 : 4
(c) 7 : 5 : 6
(d) 5 ; 7 : 6

Answer : A

Question. The _ ratio is useful for making adjustment for goodwill among the old partners.
(a) new
(b) sacrifice
(c) old
(d) Profit and Loss Adjustment

Answer : B

Question. Calculate the value of goodwill at 3 years’ purchase when: Capital employed Rs. 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

Answer : 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

Answer : D

Fill In The Blanks

Question. Goodwill is not valued during ……Dissolution of the firm……. An amount previously written off as bad debt is promised to be paid by the debtor. The promised amount will not be credited to _________________ Account.
Answer : Debtors

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

Question. Under ———- method ,goodwill is the excess of capitalized value of business over actual capital employed.
Answer : Capitalisation of average profit

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

Question.If Super profit of a firm is 10,000,its value of goodwill will be ………….if rate of return is 8%.
Answer : 1,25,000

Question The newly admitted partner brings his / her share of capital for which he will get _______ in firm.
Answer : Profit share

Question.If Super profit of a firm is 10,000,its value of goodwill will be ……….if rate of return is 8%
Answer : 1,25,000…

Question At the time of admission, if the book value and the market value of investment is same Investment Fluctuation Reserve is transferred to __________ account of the old partners in their ______________ ratio.
Answer : capitals , old

Question For the distribution of revaluation profit in case firm is following Fixed Capital Accounts method is transferred to ________ accounts
Answer : current

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

True or False

Question. Location of business does not affect the goodwill of business.
Answer : False

Question. Gaining Partner(s) compensate Sacrificing Partner(s) when Profit-sharing Ratio changes.
Answer : True

Question. Reserves and accumulated profits are distributed in old Profit-sharingRatio at the time of change in Profit-sharing Ratio.
Answer : True

Question. While computing goodwill, abnormal incomes and expenses are not ignored to calculate the value of goodwill.
Answer : False

Question. Increase in Provision for Doubtful Debts will be credited to Revaluation Account.
Answer : False

Question. Admission of a partner changes the relationship between / among existing partners.
Answer : True

Question. Efficiency of management is a factor affecting goodwill of a firm.
Answer : True

Question. New partner brings goodwill in the firm to get share in the past profits.
Answer : False

Question. Gaining Partner(s) compensate Sacrificing Partner(s) when Profit-sharing Ratio changes.
Answer : True

Question. Reserves and accumulated profits are distributed in old Profit-sharingRatio at the time of change in Profit-sharing Ratio.
Answer : True

Question. Goodwill appearing in the Balance Sheet means Purchased Goodwill.
Answer : True