CBSE Class 12 Accountancy Admission Of A Partner MCQs Set D

Question: Goodwill of the firm is valued at Rs 1,00,000. Goodwill also appears in the books at Rs 50,000. C is admitted for ¼ share. The amount of goodwill to be brought in by C will be:
a) Rs 20,000
b) Rs 25,000
c) Rs 30,000
d) Rs 40,000
Answer: b

Question: A and B are partners sharing profits in the ratio of 7 : 3. C is admitted as a new partner. “A” gave 1/7th of his share and “B” gave 1/3rd of his share to C. New Profit-sharing Ratio will be:
a) 6 : 2 : 2
b) 4 : 1 : 1
c) 3 : 2 : 2
d) None
Answer: a

Question: When goodwill is not recorded in the books at all on admission of a partner?
a) If paid privately
b) If brought in cash
c) If not brought in cash
d) If brought in kind
Answer: a

Question: The Credit Balance of Profit and Loss appears in the books at the time of admission of partner will be transferred to:
a) Profit and Loss Appropriation Account
b) All partners’ Capital Account
c) Old partners’ Capital Account
d) Revaluation Account
Answer: c

Question: Revaluation Account is a:
a) Real Account
b) Nominal Account
c) Personal Account
d) None of the above
Answer: b

Question: If the new partner brings his share of goodwill in cash, it will be shared by old partners in:
a) Sacrificing Ratio
b) Old Profit-sharing Ratio
c) New Ratio
d) Capital Ratio
Answer: a

Question: The balance in the Investment Fluctuation Fund after meeting the fall in book value of investment, at the time of admission of partner will be transferred to:
a) Revaluation Account
b) Capital Account of old partners
c) General Reserve
d) Capital Account of all partners
Answer: b

Question: X and Y share profits and losses in the ratio of 4 : 3. They admit Z in the firm for 3/7th share, which he gets 2/7th from X and 1/7th from Y. New Profit-sharing Ratio will be:
a) 7 : 3 : 3
b) 2 : 2 : 3
c) 5 : 2 : 3
d) 2 : 3 : 3
Answer: b

Question: R and S are partners sharing profits in the ratio of 5 : 3. T joins the firm and R gives him 1/4th of his share and S gives 1/5th of his share to him. New Profit-sharing Ratio will be:
a) 75 : 48 : 37
b) 45 : 32 : 27
c) 3 : 7 : 4
d) 35 : 30 : 25
Answer: b

Question: On admission of a partner, which of the following items in the Balance Sheet is transferred to the credit of Capital Accounts of old partners in the old Profit-sharing Ratio, if Capital Accounts are maintained following Fluctuating Capital Accounts Method?
a) Deferred Revenue Expenditure
b) Profit and Loss Account Debit Balance
c) Profit and Loss Account Credit Balance
d) Balance in Drawings Account of partners
Answer: c

Question: X and Y are partners sharing profits in the ratio of 5 : 3. They admitted Z for 1/5th share in profits, for which he paid Rs 1,20,000 as Capital and Rs 60,000 as Goodwill. Capitals for each partner, taking Z’s capital as base capital will be:
a) 3,00,000, 1,20,000 and 1,20,000
b) 3,00,000, 1,20,000 and 1,80,000
c) 3,00,000, 1,80,000 and 1,20,000
d) 3,00,000, 1,80,000 and 1,80,000
Answer: c

Question: If the new partner brings any additional amount of cash other than his capital contribution, then it is termed as:
a) Capital
b) Reserves
c) Profits
d) Premium for Goodwill
Answer: d

Question: Amit and Anil are partners sharing profits in the ratio of 5 : 3, having capitals of Rs 2,50,000 and Rs 2,00,000 respectively. Atul was admitted as partner for 1/5th share in profits who brings Rs 50,000 as Capital and Rs 16,000 as Goodwill. Capitals are to be in proportion to profit-sharing ratio based on Atul’s share. Capitals of Amit, Anil and Atul respectively after admission will be:
a) 1,25,000 : 75,000 : 50,000
b) 2,20,000 : 1,82,000 : 66,000
c) 2,92,500 : 2,25,000 : 50,000
d) 2,82,500 : 2,19,500 : 66,000
Answer: a

Question: X and Y are partners sharing profits in the ratio of 3 : 1. They admit Z as a partner who pays Rs 4,000 as Goodwill. New Profit-sharing Ratio being 2 : 1 : 1 among X, Y, Z. Goodwill will be credited to:
a) X and Y as Rs 3,000 and Rs 1,000
b) X only
c) Y only
d) None
Answer: b

Question: The need of revaluation of assets and liabilities on admission is:
a) Assets and Liabilities should appear at revised values
b) Any profit and loss on account of change in values belong to old partners
c) All unrecorded assets and liabilities get recorded
d) None of the above
Answer: b

Question: A, B and C are equal partners. They wanted to change the profit-sharing ratio to 4 : 3 : 2. They raised the goodwill to Rs 90,000. The effected accounts will be:
a) C’s Capital A/c Dr 10,000 To A’s Capital A/c 10,000
b) B’s Capital A/c Dr 10,000 To A’s Capital A/c 10,000
c) C’s Capital A/c Dr 10,000 To B’s Capital A/c 10,000
d) A’s Capital A/c Dr 10,000 To C’s Capital A/c 10,000
Answer: d

Question: A and B are partners, sharing profits in the ratio of 5 : 3. They admit C for 1/5th share in profits, which he acquires equally from both A and B. New Profit-sharing Ratio will be:
a) 21 : 11 : 8
b) 20 : 10 : 4
c) 15 : 10 : 5
d) 10 : 5 : 4
Answer: a

Question: A and B are partners sharing profits in the ratio of 3 : 2. On admission of C for 1/5th share, Land is appreciated by 10% (Book Value Rs 80,000), Building is decreased by 20% (Rs 2,00,000), Unrecorded Debtors of Rs 1,250 are brought in the books and Creditors of Rs 2,750 need not be paid. The gain/profit or loss on revaluation will be:
a) Loss Rs 28,000
b) Loss Rs 40,000
c) Profit Rs 28,000
d) Profit Rs 40,000
Answer: a

Question: When a new partner brings cash for goodwill, the amount is credited to:
a) Realisation Account
b) Cash Account
c) Premium for Goodwill Account
d) Revaluation Account
Answer: c

Question: A and B are partners sharing profits in the ratio of 5 : 3. They admit C for 1/5th share in profits. He contributes Rs 30,000 for his share of goodwill. The total value of the goodwill of the firm will be:
a) Rs 1,50,000
b) Rs 1,20,000
c) Rs 1,00,000
d) Rs 1,60,000
Answer: b

Question: XYZ club has a bar that maintains a separate trading account for its trading activities. Which of the following is the treatment of profit or loss on bar trading activities?
a) Profit or loss is directly shown in the Balance Sheet
b) Profit or loss is to be presented in income and expenditure account
c) Profit and loss is credited in income statement
d) Profit or loss is added to accumulated fund
Answer: b

Question: A and B are partners sharing profits in the ratio of 3 : 2. A’s Capital is Rs 30,000 and B’s Capital is Rs 15,000. They admit C for 1/5th share of profits. C will bring as his capital:
a) Rs 9,000
b) Rs 12,000
c) Rs 14,500
d) Rs 11,250
Answer: d

Question: The control of non-trading concern rests in the hands of:
a) Directors
b) Managing Agents
c) Governing Body
d) Promoters
Answer: c

Question: A, B and C share profits and losses in the ratio of 3 : 2 : 1. D is admitted for 1/6th share which he gets from A. New ratio will be:
a) 2 : 2 : 1 : 1
b) 3 : 1 : 1 : 1
c) 2 : 2 : 2 : 1
d) 1 : 1 : 2 : 2
Answer: a

Question: In regard to rent expenses paid in advance of a non-profit organisation, which of the following classification is correct?
a) Expense
b) Liability
c) Equity
d) Assets
Answer: d

Question: A and B are partners sharing profits in the ratio of 3 : 2. A’s capital is Rs 48,000, B’s capital is Rs 32,000. C is admitted for 1/5th share in profits. C will bring as his capital:
a) Rs 20,000
b) Rs 16,000
c) Rs 1,00,000
d) Rs 64,000
Answer: a

Question: The Receipt and Payment account of a non-profit organisation is a:
a) Nominal Account
b) Real Account
c) Income Statement Account
d) Financial Statements
Answer: b

Question: If debit side of Receipt and Payment Account exceeds the credit side, it represents:
a) Deficit balance
b) Surplus balance
c) Cash at Bank
d) Bank overdraft
Answer: c

Question: A and B share profits equally. They admit C for 1/7th share. New Profit-sharing Ratio of A and B is:
a) 4/7, 1/7
b) 3/7, 3/7
c) 2/7, 2/7
d) 2/7, 4/7
Answer: b

Question: Deficit balance can be shown in Balance Sheet as:
a) Liability
b) Assets
c) Owner’s equity
d) None of the above
Answer: b

Question: A, B, C and D are partners. They change their profit sharing ratio to 2 : 2 : 1 : 1. C’s sacrifice is:
a) 1/6
b) 1/12
c) 1/24
d) 2/6
Answer: b

Question: Which of the following is to be recorded in an Income and Expenditure Account?
a) Purchase of a fixed asset
b) Capital expenditure incurred on a fixed asset
c) Profit on the sale of a fixed asset
d) Sale of a fixed asset
Answer: c

Question: A and B share profits in the ratio of 3 : 4. C is admitted for 1/5th share. New Profit-sharing Ratio will be:
a) 3 : 4 : 1
b) 12 : 16 : 7
c) 16 : 12 : 7
d) 12 : 6 : 7
Answer: b

Question: Which of the following is the accounting equation for a non-profit organisation?
a) Asset = Capital + Liabilities
b) Capital + Liabilities = Assets
c) Accumulated Fund + Liabilities = Assets
d) Liabilities = Assets + Accumulated Fund
Answer: c

Question: A and B are partners. C is admitted for 1/5th share. C brings Rs 1,20,000 as his share in capital. Net worth of the firm is:
a) Rs 1,00,000
b) Rs 4,00,000
c) Rs 1,20,000
d) Rs 6,00,000
Answer: d

Question: Income & Expenditure Account is based on:
a) Cash Accounting
b) Accrual Accounting
c) Government Accounting
d) Management Accounting
Answer: b

Question: A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. D is admitted for 2/9th share of profits. He brings Rs 30,000 as capital. New Profit-sharing Ratio is 3 : 2 : 2 : 2. Goodwill amount will be credited in the capital account of:
a) A only
b) B and C equally
c) A and B equally
d) A and C equally
Answer: b

Question: A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. They admit D as partner in the firm. A, B and C give 1/3rd, 1/6th, 1/9th share of their respective profits. The share of profit of D will be:
a) 1/10
b) 13/54
c) 12/54
d) 10/55
Answer: b

Question: A and B share profits and losses in the ratio of 3 : 2. Their respective capitals are Rs 1,20,000 and Rs 54,000. C is admitted for 1/3rd share in profits who brings Rs 75,000 as his share of capital. Capitals of A and B to be adjusted according to C’s share. A will withdraw from capital:
a) Rs 30,000
b) Rs 32,000
c) Rs 15,000
d) Rs 28,000
Answer: a

Question: X and Y are partners. Z is admitted as partner for 1/7th share. New Profit-sharing Ratio will be:
a) 2 : 3 : 1
b) 3 : 3 : 1
c) 6 : 5 : 2
d) 1 : 1 : 1
Answer: b

Question: Second hand furniture worth Rs. 6,000 was purchased. It was repaired for Rs.600 and installed by workmen to whom Rs. 200 was paid as wages. The furniture should be capitalised for
a) Rs.6,200
b) Rs.6,800
c) Rs.6,600
d) Rs.6,000
Answer: b

Question: Subscription received but not yet earned is considered as
a) Asset
b) Liability
c) Income
d) Expenditure
Answer: b

Question: Receipt & Payment Account shows
a) A debit balance
b) A credit balance
c) Surplus or deficit
d) Capital fund
Answer: a

Question: Donations received for special purpose should be
a) Credited to a separate fund account and shown in the Balance Sheet
b) Treated as revenue
c) Treated as revenue unless the amount is large
d) Not recorded at all
Answer: a

Question: At the beginning of an accounting year a club has assets of Rs. 19,000 and liabilities of Rs. 5,000. Rs. 1,800 is the debit balance of the income & expenditures account. The opening capital fund is
a) Rs. 18,000
b) Rs. 11,200
c) Rs. 15,800
d) Rs. 24,800
Answer: c

Question: Subscription received in advance during the accounting year is
a) An income
b) An expense
c) Asset
d) Liability
Answer: d

Question: Which should be considered as capital receipt of a club
a) Donation
b) Sale of newspaper
c) Sale of bar items
d) Sale of furniture
Answer: d

Question: Receipt and Payment account includes
a) Revenue items
b) Cash items
c) Revenue & Cash items
d) None of the above
Answer: c

Question: On what basis receipts and payments account is made
a) Cash basis
b) Accrual basis
c) Both Cash & Accrual basis
d) None of the above
Answer: a

Question: Amount received from the sale of old furniture by a club is treated as
a) Revenue Receipt
b) Capital Receipt
c) Asset
d) Liability
Answer: b

Question: Salaries payable for the current year amount to Rs. 8,500 at the end of the year. Outstanding salaries amounted to Rs. 300. Salaries paid in advance last year pertaining to the current year amounted to Rs. 500. Prepaid salaries for the next year amount to Rs. 250. Total amount paid for salaries during the year is
a) Rs. 7,550
b) Rs. 7,500
c) Rs. 7,950
d) Rs. 6,500
Answer: c

Question: Fixed assets fund is
a) Endowment Fund
b) Current restricted Fund
c) Current unrestricted fund
d) Meant for accounting of assets and depreciation
Answer: a

Question: The opening balance of the Prize fund of a sports club was Rs. 6,400. Further donations towards this fund received during the accounting year amounted to Rs. 4,300. During the year, Rs. 3,500 was spent on prizes and Rs. 400 was received as interest on investment of the Prize Fund. The closing balance of the Prize fund is
a) Rs. 1,900
b) Rs. 10,200
c) Rs. 10,600
d) Rs. 7,600
Answer: c

Fill in the blanks:

Question: Endowment Fund is ——,—-Fund.
Answer: General fund

Question: ——————— ——– represents the excess of assets over liabilities.-
Answer: Capital fund

Question: Restricted fund can be used for —-, —-purpose
Answer: Specific

Question: General Fund can be transferred to — — Fund
Answer: Any other

Question: When Expenditure is paid out of current/ restricted fund, cash/bank account is credited and ——–. ——————–is debited.
Answer: Restricted fund

Question: Fund based accounting is used by —-,———-organisations.
Answer: Not for profit

True or False

Question: Income & expenditure account do not have opening balance.
Answer: True

Question: In the income and Expenditure Account, all incomes received during the year irrespective of the year for which they are received, are to be recorded.
Answer: False

Question: Not for profit concerns concentrate their efforts on maximising the profits.
Answer: False

Question:There is no difference between the nature of Receipt & Payment Account and Income & Expenditure account.
Answer: False

Question: Charitable institutions prepare income and expenditure account at the end of every financial year.
Answer: True

Question: All receipts are the items of revenue nature.
Answer: False

Fill in the blanks:

Question: At the time of admission of a partner new profit-sharing ratio is used for sharing future ___________’
Answer: Profits

Question: At the time of admission, Gain (Profit) or Loss on revaluation is shared by the old partners in their ________________ ratio.
Answer: Old

Question: In case of upward revaluation of a liability, Revaluation Account is ___________.
Answer: Debited

Question: Revaluation account is a __________________ account.
Answer: Nominal

Question: Sacrificing ratio is computed at the time of___________
Answer: Reconstitution

Question: Revaluation Account is prepared at the time of _____
Answer: Reconstitution

Question: Reserve appearing in the Balance Sheet at the time of admission of a partner, is distributed among partners in their ____________ Ratio.
Answer: Old

Question: In the case of downward revaluation of an asset, Revaluation Account is ___________.
Answer: Debited

Question: At the time of admission, the assets are revalued and liabilities are reassessed. The increase or decrease in the values is debited or credited in ________________ Account.
Answer: Revaluation

True or False:

Question: New partner may bring his share of goodwill premium in kind.
Answer: True

Question: Goodwill is an intangible current asset.
Answer: False

Question: In the absence of agreement, consent of all partners is required to admit a partner.
Answer: True

Question: At the time of admission of partner, the partnership firm is dissolved.
Answer: False

Question: Super profit is a profit a firm earns above the normal profits.
Answer: True

Question: Claims of Workmen Compensation if more than Workmen Compensation Reserve is debited to Revaluation Account
Answer: True

Question: Self-generated Goodwill is recorded in the books of accounts and shown in the Balance Sheet as an asset as per Accounting Standard -26, Intangible Assets.
Answer: False

Question: The goodwill brought at the time of admission of partner will be distributed among all the partners in new Profit-sharing Ratio.
Answer: False

Question: New partner may or may not contribute Capital at the time of admission.
Answer: True

Question: In case of admission of a partner, all existing partners sacrifice.
Answer: False