CBSE Class 12 Accountancy Admission Of A Partner MCQs Set C

Question. A, B and C are partners in a firm, if D is admitted as a new partner :
(a) Old firm is dissolved
(b) Old firm and old partnership is dissolved
(c) Old partnership is reconstituted
(d) None of the options

Answer : C

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 options

Answer : A

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

Answer : B

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

Answer : 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 options

Answer : A

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

Answer : C

Question. Balance in the Investment Fluctuation Reserve, after meeting the loss on Revaluation of Investments, at the time of admission of a partner will be transferred to :
(a) Old Partners’ Capital Accounts
(b) Revaluation Account
(c) Sacrificing Ratio
(d) None of the options

Answer : A

Question. The firm of P, Q and R with profit sharing ratio of 6:3:1, had the balance in General Reserve Account amounting ₹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 ₹54,000
(b) P will be debited by ₹. 54,000
(c) P will be credited by ₹36,000
(d) P will be debited by ₹36,000

Answer : A

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

Answer : D

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

Answer : 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 options

Answer : 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 options

Answer : B

Question. Which clause should be mentioned in partnership deed
(a) All of the options
(b) Description of Firms
(c) Nature of business
(d) Description of partners

Answer : A

Question. If partners capitals are fixed, premium for goodwill will be:
(a) Credited to the current A/cs of the Sacrificing partners
(b) Credited to the Partners Capital A/cs
(c) Credited to the P/L Adjustment A/c
(d) None of the options

Answer : A

Question. If the new partner brings his share of goodwill in cash, it will be shared by old partners in :
(a) Ratio of sacrifice
(b) Old profit-sharing ratio
(c) New profit-sharing ratio
(d) In Capital ratio

Answer : A

Question. When the incoming partner pays his share of goodwill privately to the sacrificing partner outside the business Which account should be debited in the books of account
(a) No entry should be recorded
(b) Premium for goodwill A/c
(c) Partners capital A/c
(d) None of the options

Answer : A

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 dee(d)
(b) If all the partners agree, a new partner can be admitte(d)
(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

Answer : A

Question. 11 As per ———, only purchased goodwill can be shown in the Balance Sheet.
(a) AS 37
(b) AS 26
(c) Section 37
(d) AS 37

Answer : C

Question. Yash and Manan are partners sharing profits in the ratio of2:1. They admit Kushagra intopartnership for 25% share of profit. Kushagra acquired the share from old partners in theratio 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

Answer : C

Question. Premium brought by newly admitted partner should be:
(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

Answer : A

Question. Sacrificing ratio is ascertained at the time of
(a) Death of partner
(b) Retirement of partner
(c) Admission of a new partner
(d) None of the options Answer: Admission of a new partner

Answer : C

Question. Partners Salary is debited to
(a) Profit & loss Appropriation A/c
(b) Profit & loss A/c
(c) Revaluation A/c
(d) None of the options

Answer : A

Question. Which items may appear on the credit side of the partners current account
(a) Interest on Capital
(b) Salary
(c) Commission
(d) All of the options

Answer : A

Question. When is brought in cash by the new partner, then the method is known as
(a) Revaluation Method
(b Memorandum Revaluation Method
(c) Premium Method
(d) None of the options

Answer : C

Question. The firm number of partner increase
(a) Admission of a new partner
(b) Dissolution of a new partner
(c) Retirement of new partner
(d) Death of new partner Answer:

Answer : A

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

Answer : A

Question. If a new partner is admitted during the year the profits for the year should be divided between ____ period on an agreed basis
(a) Old profit sharing
(b) Equal
(c) None of the options
(d) Pre-admission and post admission

Answer : D

Question. Which of following account is prepared at the time of admission of a new partner?
(a) Revaluation Account
(b) Realisation Account
(c) Profit & loss A/c
(d) None of the options

Answer : 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 options

Answer : A

Question. Aryaman and Bholu are partners sharing profit and losses in ratio of 5 :3. Chirag isadmitted for 1/4th share. On the date of reconstitution, the debtors stood at Rs 40,000, billreceivable 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, earlierhasbeenreported to be dishonore(d) The firm has sold, the debtor so arising to a debt collectionagency 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 toRevaluation Account would be:
(a) Rs 4,400
(b) Rs 4,000
(c) Rs.3,400
(d) None of the options

Answer : C

Question. On admission of a new partner, the method of valuation of goodwill is decided by:
(a) the new partner only
(b) the old partners only
(c) the old partners and the new partner
(d) the accountant of the firm

Answer : C

Question. If the incoming partner is to bring Premium for Goodwill in cash and also a balance exists in Goodwill Account, then this Goodwill Account is written among Old Partners in :
(a) New Profit Sharing Ratio
(b) Old Profit Sharing Ratio
(c) Sacrificing Ratio
(d) None of the options

Answer : B

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 options

Answer : B

Question. share of goodwill brought in by new partner in cash is shared by old partners in
(a) Sacrificing ration
(b) Old ratio
(c) New ratio
(d) All of the options

Answer : A

Question. in the absence of partnership deed, Interest on Capital and drawing to be
(a) Not paid
(b) Paid
(c) 6% p.a
(d) None of the options

Answer : A

Question. a partner may retire from firm
(a) Both
(b) With an Express agreement among the partners
(c) With the consent of all the partners
(d) None of the options

Answer : A

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

Answer : C

Question. At the time of admission of a new partner, the balance of Workmen CompensationReserve 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

Answer : A

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

Answer : B

Question. If the partners capital account are fixed , Commission payable to partner will show
(a) Dr. Side of current A/C
(b) Both
(c) Cr. Side of current A/C
(d) None of the options

Answer : C

Fill In The Blanks

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.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. '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?
Answer : True

Question. 'At the time of admission, old partnership comes to an end'. Is the statement true or false?
Answer : True

Question. 'As per Section 26 of the Indian Partnership Act, 1932, a person can be admitted as a newpartner if it is agreed in the Partnership Deed'. Is the statement True or False?
Answer : False

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.
Answer : Hidden goodwill

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…

True or False

Question. 'Average profit method' takes into consideration the future maintainable profits.
Answer : True

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

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

Question. Goodwill can be sold in part.
Answer : False

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

Question. Goodwill is a fictitious asset
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