CBSE Class 12 Accountancy Reconstitution Of Firm MCQs

Question: The partners whose share decrease as a result of change in profit sharing ratio are known as

a) Sacrificing Partners

b) Gaining Partners

c) Sleeping Partners

d) None of the options

Answer: Sacrificing Partners

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: Gaining Partners

Question: Gaining ratio is the ratio with which the profit share of the partners

a) Increase

b) Decrease

c) Both

d) None of the options

Answer: Increase

Question: Sacrificing Partners is the ratio with which the profit share of the partners

a) Decrease

b) Increase

c) Both

d) None of the options

Answer: Decrease

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: Accumulated Profits

Question: What adjustment are required when existing partners decide to change their profit sharing ratio?

a) All of the options

b) Adjustment for Reserve

c) Accumulated Profits & Losses

d) Adjustment for Goodwill

Answer: All of the options

Question: A firm is reconstituted , whenever there is a

a) All of the options

b) Retirement of Existing Partner

c) Death of a partner

d) Admission of a new partner

Answer: All of the options

Question: How can the gaining partner compensate the sacrificing partner in case of change in profit sharing ratio

a) By paying Goodwill

b) By paying Profit

c) By Paying losses

d) None of the options

Answer: By paying Goodwill

Question: Employees Provident fund is

a) Not Distributed among the partners

b) Distributed among the partners

c) Distributed in profit sharing ratio

d) None of the options

Answer: Not Distributed among the partners

Question: New Profit sharing ratio is the ratio in which all the partners, including the new partner, share future

a) Profits & Losses of the firm

b) Losses of the firm

c) Profits of the firm

d) None of the options

Answer: Profits & Losses of the firm 

Question: Profit & loss adjustment account, which

a) Both

b) Increase value of the assets

c) Decrease Value of Liabilities

d) None of the options

Answer: Both

Question: General reserve at the time of admission of a partner is transferred to

a) Old partners capital Account

b) Revaluation Account

c) Both

d) None of the options

Answer: Old partners capital Account

Question: When the incoming Partner brings in his share of premium for goodwill in cash, it is adjusted by crediting to

a) Premium ( Goodwill) A/C

b) His Capital A/c

c) Sacrificing Partners capital A/c

d) None of the options

Answer: Premium ( Goodwill) A/C

Question: Z is admitted to a firm for 1/4 share in the profits for which he brings in Rs. 10000towards premium for goodwill, it will be taken by the old partners in

a) The Sacrificing ratio

b) The old Profit sharing ratio

c) The new profit sharing ratio

d) None of the options

Answer: the Sacrificing ratio

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: Nominal Account

Question: The balance in the investment fluctuation fund, after meeting the loss on revaluation of investments, at the time of admission of a partner will be transferred to

a) Old partners capital Account

b) The revaluation Account

c) Personal Account

d) None of the options

Answer: Old partners capital Account

Question: If the incoming partner is to bring in premium for goodwill in cash and also a balance exists in the goodwill account, then this goodwill account is written of among the old partners in

a) The old profit sharing ratio

b) The new profit sharing ratio

c) The sacrificing ratio

d) None of the options

Answer: The old profit sharing ratio

Question: X and Y are partners sharing profits in the ratio of 2:1, they admit Z into the partnership for 1/4th share in profits for which brings in Rs. 20000 as his share of capital. Hence the adjusted capital of X and Y will be

a) 40000 and 20000 Rs. Respectively

b) 32000 and 16000 respectively

c) 60000 and 30000 Rs. Respectively

d) None of the options

Answer: 40000 and 20000 Rs. Respectively

Question: When A and B , sharing profits and losses in the ratio of 3:2, Admit C as a partner giving him 1/5th share of profits, this will be given by A and B

a) In the ratio of their profits

b) Equally

c) In the ratio of their capitals

d) None of the options

Answer: In the ratio of their profits

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: The old partners in their old profit sharing ratio

Question: The new partner get the right of

a) Both

b) Share Future profit

c) Share in the assets

d) None of the options

Answer: Both

Question: The ratio in which the continuing partners acquire the outgoing partners share is called

a) Gaining Ratio

b) New Profit sharing ratio

c) Old Profit sharing ratio

d) None of the options

Answer: Gaining Ratio

Question: New Profit sharing ratio is

a) Old Share+Acquire Share

b) New Share +Old Share

c) Old Share-Acquire share

d) None of the options

Answer: Old Share+Acquire Share

Question: Gaining ratio is

a) New Ratio-Old ratio

b) New Ratio+Old ratio

c) New Ratio-Profit Sharing ratio

d) None of the options

Answer: New Ratio-Old ratio

Question: At the time of retirement of a partner, if goodwill appears in the balance sheet, it must be written off, the capital accounts of all partners are debited in

a) The old profit sharing ratio

b) The new profit sharing ratio

c) The capital ratio

d) None of the options

Answer: The old profit sharing ratio

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:  The old profit sharing ratio

Question: On the death of a partner, credit balance of profit and loss account appearing in the balance sheer should be credited to the capital accounts of

a) All partners including the deceased partner in their profit sharing ratio

b) The remaining partners in the new profit sharing ratio

c) Equally

d) None of the options

Answer: All partners including the deceased partner in their profit sharing ratio

Question: According to the partnership Act ( SEC-37), the interest payable to the deceased partner on the amount left by him will be

a) 6% P.A

b) 10% P.A

c) 12% P.A

d) None of the options

Answer: 6% P.A

Question: The share of goodwill of the retiring partner is debited to remaining partners in their

a) Gaining Ratio

b) New Profit sharing ratio

c) Old Profit sharing ratio

d) None of the options

Answer: Gaining Ratio

Question: Decrease in the value of Liabilities on reconstitution of the partnership firm results into

a) Gain to the Existing Partner

b) Loss to the Existing Partner

c) Neither Gain of loss to Existing partner

d) None of the options

Answer: Gain to the Existing Partner 

Question: At the time of admission of a new partner, General reserve appearing in the old balance sheet is transferred to

a) Old partners capital Account

b) New partners capital account

c) All Partners capital A/c

d) None of the options

Answer: Old partners capital Account

Question: On the admission of a new partner, increase in the value of assets is debited to

a) Assets Account

b) Revaluation A/c

c) Profit & Loss Account

d) None of the options

Answer: Assets Account

Question: Change in profit sharing ratio of existing partners result in

a) Reconstitution of firm

b) Revaluation firm

c) Amalgamation firm

d) None of the options

Answer: Reconstitution of firm

Question: Change in the partnership agreement results in

a) Reconstitution of firm

b) Dissolution of firm

c) Amalgamation firm

d) None of the options

Answer: Reconstitution of firm

Question: Change in partnership agreement

a) Changes in the relationship among the partner

b) Results in end of partnership business

c) Dissolved the partnership firm

d) None of the options

Answer: Changes in the relationship among the partner

Question: On reconstitution of the partnership firm, increase in the value of the assets will result into

a) Gain to the Existing Partner

b) Loss to the Existing Partner

c) Neither Gain of loss to Existing partner

d) None of the options

Answer: Gain to the Existing Partner

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) Y Sacrifice 1/10

b) X Sacrifice 1/10

c) Both

d) None of the options

Answer: Y Sacrifice 1/10

Question: A, B and C are partners in the firm, if D is admitted as a new partner

a) Old partnership is reconstitute

b) Old firm is dissolved

c) Both

d) None of the options

Answer: Old partnership is reconstitute

Question: Generally the interest on capital is considered as

a) An Appropriation profit

b) An asset

c) An Expense

d) None of the options

Answer: An Appropriation profit

Question: Revaluation account or Profit & loss adjustment account is

a) Nominal Account

b) Real Account

c) Personal Account

d) None of the options

Answer: Nominal Account