CBSE Class 12 Accountancy Retirement or Death of a Partner MCQs Set B

Question. A, B and C are partners sharing profit or loss in the ratio of 2 : 3 : 4. A retires and after A’s retirement B and C agreed to share profit or loss in the ratio of 3 : 4 in future. Their gaining ratio will be :
(a) 2 : 3
(b) 4 : 3
(c) 3 :4
(d) 1 : 1

Answer : C

Question. A, B and C are partners sharing profits in the ratio of 1/2 : 1/4 : 1/4. New ratio on the retirement of B will be :
(a) 2 : 4
(b) 1 : 2
(c) 2 : 1
(d) 1/4 : 1/2

Answer : C

Question. As per section ———— of the Indian Partnership Act, a retiring partner becomes entitled to profits after retirement if his dues remain unpaid
(a) Section 73
(b) Section 26
(c) Section 4
(d) Section 37

Answer : D

Question. On the death of a partner, the amount due to him will be credited to :
(a) All partner’s Capital Accounts
(b) Remaining partner’s Capital Accounts
(c) His Executor’s Account
(d) Governments’ Revenue Account

Answer : C

Question. A, B and C are partners sharing profits in the ratio of 5 : 2 : 1. If the new ratio on the retirement of A is 3 : 2, what will be the gaining ratio?
(a) 11: 14
(b) 3 : 2
(c) 2 : 3
(d) 14:11

Answer : D

Question.. Abhishek, Rajat and Vivek are partners sharing profits in the ratio of 5 : 3 : 2. If Vivek retires, the new Profit Sharing Ratio between Abhishek and Rajat will be :
(a) 3 : 2
(b) 5 : 3
(c) 5 : 2
(d) None of these

Answer : B

Question. Q and R were partners sharing profits in the ratio 2 : 2 : 1. Q retires and the new profit sharing ratio of P and R will be 3 : 1. Gaining ratio will be 
(a) 1 : 7
(b) 2 : 1
(c) 1 : 2
(d) 7 : 1

Answer : D

Question. A, B and C were partners, sharing profit and losses in the ratio of 3:2:1. B died, the firm decided to value the goodwill on the basis of 3 years’ purchase of average of 5 years profits. The profits of the firm for the last five years before charging interest on capital were Rs. 11,000, Rs. 9,000, Rs. 11,000, Rs. 7,000 and Rs. 8,000. The capital of the firm stood at Rs. 50,000 and interest rate is 8%. Value of goodwill will be
(a) Rs. 10,000.
(b) Rs. 15,600.
(c) Rs. 21,000.
(d) Rs. 11,000

Answer : B

Question.The Partnership Deed does not have a clause on rate of interest to be paid on amount due to heirs of deceased partner. At what rate interest on the outstanding amount shall be payable?
(a) At the rate at which the banks grant loan.
(b) At the rate of interest provided ¡n the Partnership Act, 1932.
(c) At the rate of interest demanded by the heirs of the deceased partner.
(d) 8% p.a.

Answer : B

Question.A, Band Care partners sharing profit and losses in the ratio of 2:2:1.B died, at that time goodwill of the firm valued at Rs. 30,000. What contribution has to be made by A and C in order to pay B’s Executor?
(a) Rs. 20,000 and Rs. 10,000.
(b) Rs. 15,000 and Rs. 15,000.
(c) Rs. 8,000 and Rs. 4,000.
(d) Rs. 6,000 and Rs. 6,000.

Answer : C

Question.X, Y and Z were partners sharing profits in the ratio of 2:2:1. Y died on 30th June, 2020 and profit for the accounting year ended 31st March, 2020 was Rs. 36,000. If profit share of deceased partner is to be calculated on the basis of previous year’s profit, amount of profit credited to Y’s Capital Account will be
(a) Rs. 3,000.
(b) Rs. 2,400.
(c) Rs. 3,600.
(d) Rs. 2,800.

Answer : 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

Answer : C

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

Answer : B

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 options

Answer : C

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

Answer : C

Question. The amount due to deceased partner is paid to
(a) His Father.
(b) His Wife.
(c) His Legal Heir,
(d) Remaining Partners.

Answer : B

Question. A, B and C are partners in a firm sharing profit/loss in the ratio of 2 : 2 : 1. On March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2018 was Rs.6,00,000 and the profits were Rs.60,000. The sales for the period from Jan. 1,2019 to March 31, 2019 were Rs.2,00,000. The share of deceased partner in the current year’s profits on the basis of sales is :
(a) Rs.20,000
(b) Rs.8,000
(c) Rs.3,000
(d) Rs.4,000

Answer : D

Question. On retirement, the value of goodwill is credited to:
A) All partners.
B) Continuing partners.
C) Retiring partner.
D) None of the above.

Answer : C

Question.Which of the following statement is correct?
(a) Goodwill at the time of retirement of a partner is credited to remaining Partners’ Capital Accounts in sacrificing ratio.
(b) Goodwill at the time of retirement of a partner is credited to remaining Partners’ Capital Accounts in gaining ratio.
(c) Goodwill at the time of retirement of a partner is debited to remaining Partners’ Capital Accounts in sacrificing ratio.
(d) Goodwill at the time of retirement of a partner to the extent of retiring Partner’s Share is debited to remaining Partners’ Capital Accounts in gaining ratio.

Answer : D

Question.Revaluation Account is prepared to give effect to
(a) change in value of assets alone.
(b) change in value of liabilities alone.
(c) undistributed profits and losses.
(d) change in the values of assets and liabilities.

Answer : D

Question. A, B and C were partners sharing profits in the ratio of 4:5:3. C died and remaining partners decided to share profits in the ratio of 7:8, the gaining ratio will be.
(a) 8:7
(b) 4:5.
(c) 1:1.
(d) 2:1..

Answer : A

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 : A

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. P, Q and R were partners in a firm in the ratio of 5:4:3. They admit S for 1/7 share. It is agreed that Q would retain his original share. ———– will be the sacrificing ratio between P and R.
(a) 5:4
(b) 1:1
(c) 5:3
(d) 4:3

Answer : C

Question. ‘Gaining Ratio’ means :
(a) Old Ratio – New Ratio
(b) New Ratio – Old Ratio
(c) Old Ratio – Sacrificing Ratio
(d) New Ratio – Sacrificing Ratio

Answer : B

Question. Which of the following statement is correct?
(a) Goodwill at the time of retirement of a partner is credited to remaining Partners’ Capital Accounts in sacrificing ratio.
(b) Goodwill at the time of retirement of a partner is credited to remaining Partners’ Capital Accounts in gaining ratio.
(c) Goodwill at the time of retirement of a partner is debited to remaining Partners’ Capital Accounts in sacrificing ratio.
(d) Goodwill at the time of retirement of a partner to the extent of retiring Partner’s Share is debited to remaining Partners’ Capital Accounts in gaining ratio.

Answer : D

Question. A, B and C are equal partners. C retires. He surrenders 3/5th of his share in favour of A and 2/5th in favour of B. New ratio will be :
(a) 3 : 2
(b) 8 : 7
(c) 7:8
(d) 2 : 3

Answer : B

Question.A, B and C are partners sharing profits in the ratio of 1/4 : 3/10 : 9/20. The New ratio on the retirement of C will be :
(a) 6:5
(b) 5:6
(c) 4 : 3
(d) 4 : 10

Answer : B

Question.X, y and Z have been sharing profits in the ratio of 4 : 2 : 1 Z retires. X and Y take Z’s share equally. New profit sharing ratio will be :
(a) 5 : 2
(b) 5 : 3
(c) 9 : 5
(d) 4 : 2

Answer : C

Question. A, B and C share profits and losses of the firm equally. B retires from business and his share is purchased by A and C in the ratio of 2 : 3. New profit sharing ratio between A and C respectively would be :
(a) 01 : 01
(b) 02 : 02
(c) 07 : 08
(d) 03 : 05

Answer : C

Question. On the retirement of a partner, full amount of goodwill may be credited to the capital accounts of:
(a) Retiring partners
(b) Remaining partners
(c) All partners
(d) None of these

Answer : C

Question. A, B and C are partners sharing profits in the ratio of 1/4 : 3/10 : 9/20. The New ratio on the retirement of C will be :
(a) 6:5
(b) 5:6
(c) 4 : 3
(d) 4 : 10

Answer : B

Question. A, B and C are partners sharing profits in the ratio of 3:2:1, C retired. New profit-sharing ratio will be
(a) 1:3.
(b) 3:2.
(c) 1:1.
(d) None of the options

Answer : B

Question. A, S and C are partners sharing profits in the ratio of 3: 2:1, C retired, and new profit-sharing ratio is 3:2. Gaining ratio will be
(a) 3:2.
(b) 1:2.
(c) 2:1.
(d) None of the options

Answer : A

Question. A, B and Care partners in a firm, sharing profits in the ration of 2:2:1.Their Capital Accounts stood as Rs. 50,000, Rs. 50,000 and Rs. 25,000 respectively. B died, and balance in the reserve on that date was Rs. 15,000. If goodwill of the firm is Rs. 30,000 and profit on revaluation is Rs. 7,050, what amount will be transferred to B’s Executor’s Account?
(a) Rs. 50,820.
(b) Rs. 70,820.
(c) Rs. 8,820.
(d) Rs. 60,820.

Answer : B

Select the Best Alternate:

Question. Retiring partner is compensated for parting with the firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in:
(A) Gaining Ratio
(B) Capital Ratio
(C) Sacrificing Ratio
(D) Profit Sharing Ratio
Answer: A

Question. ‘Gaining Ratio’ means : (C.S. Foundation Dec. 2012)
(A) Old Ratio – New Ratio
(B) New Ratio – Old Ratio
(C) Old Ratio – Sacrificing Ratio
(D) New Ratio – Sacrificing Ratio
Answer: B

Question. What treatment is made of accumulated profits and losses on the retirement of a partner?
(A) Credited to all partner’s capital accounts in old ratio.
(B) Debited to all partner’s capital accounts in old ratio.
(C) Credited to remaining partner’s capital accounts in new ratio.
(D) Credited to remaining partner’s capital accounts in gaining ratio.
Answer: A

Question. At the time of retirement of a partner, profit on revaluation will be credited to :
(A) Capital Account of retiring partner
(B) Capital Account so fall partners in the old profit sharing ratio.
(C) Capital Account so f the remaining partners in their old profit sharing ratio
(D) Capital Account so f the remaining partners in their new profit sharing ratio
Answer: B

Question. What journal entry will be recorded for writing off the goodwill already existing in Balance Sheet at the time of retirement of a partner?
(A) Retiring Partner’s Capital A/c Dr. To Goodwill A/c
(B) All Partner’s Capital A/cs (including retiring) Dr. (in old ratio) To Goodwill A/c
(C) Remaining Partner’s Capital A/cs Dr. (in gaining ratio) To Goodwill A/c
(D) Remaining Partner’s Capital A/cs Dr. (in new ratio) To Goodwill A/c
Answer: B

Question. What journal entry will be recorded for deceased partner’s share in profit from the closure of last balance sheet till the date of his death?
(A) Profit and Loss A/c To Deceased Partner’s Capital A/c Dr.
(B) Deceased Partner’s Capital A/c To Profit and Loss A/c Dr.
(C) Deceased Partner’s Capital A/c To Profit and Loss Suspense A/c Dr.
(D) Profit and Loss Suspense A/c To Deceased Partner’s Capital A/c Dr.
Answer: D

Question. On retirement of a partner, goodwill will be credited to the Capital Account of:
(A) Retiring Partner
(B) Remaining Partners
(C) All Partners
(D) None of the Above
Answer: A

Question. On the death of a partner, the amount due to him will be credited to :
(A) All partner’s Capital Accounts
(B) Remaining partner’s Capital Accounts
(C) His Executor’s Account
(D) Governments’ Revenue Account
Answer: C

Question. How goodwill is recorded on the retirement of a partner?
(A) Remaining Partner’s Capital A/cs Dr. (In Gaining Ratio) To Retiring Partner’s Capital A/c (with his share of goodwill)
(B) Remaining Partner’s Capital A/cs Dr. (In New Ratio) To Retiring Partner’s Capital A/c (with his share of goodwill)
(C) Goodwill A/c Dr. To All Partner’s Capital A/cs (In Old Ratio)
(D) Goodwill A/c Dr. To Retiring Partner’s Capital A/c (with his share)
Answer: A

Question. A, B and C are partners in \( 3 : 4 : 2 \). B wants to retire from the firm. The profit on revaluation on that date was \( Rs 36,000 \). New ratio of A and C is \( 5 : 3 \). Profit on revaluation will be distributed as :
(A) A \( Rs 16,000 \); B \( Rs 12,000 \); C \( Rs 8,000 \)
(B) A \( Rs 12,000 \); B \( Rs 16,000 \); C \( Rs 8,000 \)
(C) A \( Rs 22,500 \); C \( Rs 13,500 \)
(D) A \( Rs 23,625 \); C \( Rs 12,375 \)
Answer: B

Question. A, B and C are partners sharing profits in the ratio of \( 5 : 2 : 1 \). If the new ratio on the retirement of A is \( 3 : 2 \), what will be the gaining ratio?
(A) \( 11 : 14 \)
(B) \( 3 : 2 \)
(C) \( 2 : 3 \)
(D) \( 14 : 11 \)
Answer: D

Question. P, Q and R are partners sharing profits in the ratio of \( 5 : 4 : 3 \). Q retires and P and R decide to share future profits equally. Gaining Ratio will be :
(A) \( 5 : 3 \)
(B) \( 1 : 1 \)
(C) \( 1 : 3 \)
(D) \( 3 : 1 \)
Answer: C

Question. A, B and C are partners sharing profits in the ratio of \( 1/2 : 1/4 : 1/4 \). New ratio on the retirement of B will be :
(A) \( 2 : 4 \)
(B) \( 1 : 2 \)
(C) \( 2 : 1 \)
(D) \( 1/4 : 1/2 \)
Answer: C

Question. A, B and C are partners sharing profits in the ratio of \( 1/4 : 3/10 : 9/20 \). The New ratio on the retirement of C will be :
(A) \( 6 : 5 \)
(B) \( 5 : 6 \)
(C) \( 4 : 3 \)
(D) \( 4 : 10 \)
Answer: B

Question. X, Y and Z have been sharing profits in the ratio of \( 4 : 2 : 1 \). Z retires. X and Y take Z’s share equally. New profit sharing ratio will be :
(A) \( 5 : 2 \)
(B) \( 5 : 3 \)
(C) \( 9 : 5 \)
(D) \( 4 : 2 \)
Answer: C

Question. P, Q and R have been sharing profits and losses in the ratio of \( 5 : 3 : 2 \). Q retires. His share is taken by P and R in the ratio of \( 2 : 1 \). New profit sharing ratio will be:
(A) \( 6 : 4 \)
(B) \( 7 : 3 \)
(C) \( 7 : 2 \)
(D) \( 6 : 3 \)
Answer: B

Question. A, B and C share profits and losses of the firm equally. B retires from business and his share is purchased by A and C in the ratio of \( 2 : 3 \). New profit sharing ratio between A and C respectively would be : (C.S. Foundation, Dec. 2012)
(A) \( 01 : 01 \)
(B) \( 02 : 02 \)
(C) \( 07 : 08 \)
(D) \( 03 : 05 \)
Answer: C

Question. P, Q and R have been sharing profits in the ratio of \( 8 : 5 : 3 \). P retires. Q takes \( 3/16th \) share from P and R takes \( 5/16th \) share from P. New profit sharing ratio will be :
(A) \( 1 : 1 \)
(B) \( 10 : 6 \)
(C) \( 9 : 7 \)
(D) \( 5 : 3 \)
Answer: A

Question. A, B and C are equal partners. C retires. He surrenders \( 3/5th \) of his share in favour of A and \( 2/5th \) in favour of B. New ratio will be :
(A) \( 3 : 2 \)
(B) \( 8 : 7 \)
(C) \( 7 : 8 \)
(D) \( 2 : 3 \)
Answer: B

Question. P, Q and R are partners sharing profits in the ratio of \( 4 : 3 : 2 \). Q retires and his share was taken up by P and R in the ratio \( 3 : 2 \). New profit sharing ratio will be :
(A) \( 16 : 29 \)
(B) \( 29 : 16 \)
(C) \( 3 : 2 \)
(D) \( 2 : 3 \)
Answer: B

Question. L, P and G are three partners sharing profits in the ratio \( 15 : 9 : 8 \). G retires. L and P decided to share profits in equal ratio. Gaining ratio will be :
(A) \( 15 : 9 \)
(B) \( 9 : 15 \)
(C) \( 7 : 1 \)
(D) \( 1 : 7 \)
Answer: D

Question. On 1st April, 2019 A, B and C were partners sharing profits and losses in the ratio of \( 5 : 3 : 2 \) respectively. On this date B retires. The new profit sharing ratio of A and C will be \( 3 : 2 \). Gaining ratio will be :
(A) \( 1 : 2 \)
(B) \( 2 : 1 \)
(C) \( 1 : 1 \)
(D) \( 5 : 2 \)
Answer: A

Question. B, P and L sharing profits in the ratio \( 4 : 3 : 2 \). B retires, P and L decided to share profits in future in the ratio of \( 5 : 3 \). Gaining ratio will be:
(A) \( 11 : 21 \)
(B) \( 21 : 11 \)
(C) \( 11 : 13 \)
(D) \( 13 : 11 \)
Answer: B

Question. P, Q and R were partners sharing profits in the ratio \( 2 : 2 : 1 \). Q retires and the new profit sharing ratio of P and R will be \( 3 : 1 \). Gaining ratio will be:
(A) \( 1 : 7 \)
(B) \( 2 : 1 \)
(C) \( 1 : 2 \)
(D) \( 7 : 1 \)
Answer: D

Question. A, B and C are equal partners in a firm. B retires and the remaining partners decide to share the profits of the new firm in the ratio of \( 5 : 4 \). Gaining ratio will be :
(A) \( 1 : 1 \)
(B) \( 1 : 2 \)
(C) \( 2 : 1 \)
(D) \( 5 : 4 \)
Answer: C

Question. A, B and C are partners sharing profit or loss in the ratio of \( 3 : 2 : 1 \). B retires and after B’s retirement A and C agreed to share profit or loss in the ratio of \( 3 : 2 \) in future. Their gaining ratio will be :
(A) \( 3 : 1 \)
(B) \( 1 : 3 \)
(C) \( 3 : 7 \)
(D) None of the above
Answer: C

Question. A, B and C are partners sharing profit or loss in the ratio of \( 4 : 3 : 2 \). C retires and after C’s retirement A and B agreed to share profit or loss in the ratio of \( 4 : 3 \) in future. Their gaining ratio will be :
(A) \( 3 : 2 \)
(B) \( 4 : 3 \)
(C) \( 3 : 4 \)
(D) \( 1 : 1 \)
Answer: B

Question. A, B and C are partners sharing profit or loss in the ratio of \( 2 : 3 : 4 \). A retires and after A’s retirement B and C agreed to share profit or loss in the ratio of \( 3 : 4 \) in future. Their gaining ratio will be :
(A) \( 2 : 3 \)
(B) \( 4 : 3 \)
(C) \( 3 : 4 \)
(D) \( 1 : 1 \)
Answer: C

Question. A, B and C were partners in a firm sharing profits and losses in the ratio of \( 2 : 2 : 1 \). The capital balances are \( Rs 50,000 \) for A, \( Rs 70,000 \) for B, \( Rs 35,000 \) for C. B decided to retire from the firm and balance in reserve on the date was \( Rs 25,000 \). If goodwill of the firm was valued at \( Rs 30,000 \) and profit on revaluation was \( Rs 7,500 \) then, what amount will be payable to B?
(A) \( Rs 70,820 \)
(B) \( Rs 76,000 \)
(C) \( Rs 75,000 \)
(D) \( Rs 95,000 \)
Answer: D

Question. P, Q and R are sharing profits and losses equally. R retires and the goodwill is appearing in the books at \( Rs 30,000 \). Goodwill of the firm is valued at \( Rs 1,50,000 \). Calculate the net amount to be credited to R’s Capital A/c.
(A) \( Rs 60,000 \)
(B) \( Rs 50,000 \)
(C) \( Rs 40,000 \)
(D) \( Rs 10,000 \)
Answer: C

Question. Ram, Krishna and Ganesh were sharing profits and losses in the ratio of \( 5 : 3 : 2 \). Ram retires and Krishna and Ganesh share the future profits and losses equally. Goodwillo f the firm is valued at \( Rs 1,00,000 \). Calculate the amount of goodwill to be debited to Krishna’s and Ganesha’s Capital A/c.
(A) \( Rs 60,000 \text{ & } Rs 40,000 \)
(B) \( Rs 20,000 \text{ & } Rs 30,000 \)
(C) \( Rs 40,000 \text{ & } Rs 60,000 \)
(D) \( Rs 30,000 \text{ & } Rs 20,000 \)
Answer: B

Question. A, B and C are partners with profit sharing ratio \( 4 : 3 : 2 \). B retires and goodwill was valued \( Rs 1,08,000 \). If A & C share profits in \( 5 : 3 \), find out the goodwill shared by A and C in favour of B.
(A) \( Rs 22,500 \text{ and } Rs 13,500 \)
(B) \( Rs 16,500 \text{ and } Rs 19,500 \)
(C) \( Rs 67,500 \text{ and } Rs 40,500 \)
(D) \( Rs 19,500 \text{ and } Rs 16,500 \)
Answer: D

Question. A, B and C are sharing profits in the ratio of \( 3 : 2 : 1 \). B retires and on the day of B’s retirement Goodwill is valued at \( Rs 60,000 \). A and C decided to share future profits in the ratio of \( 3 : 2 \). Journal entry will be :
(A) A’s Capital A/c Dr. \( 18,000 \); C’s Capital A/c Dr. \( 42,000 \) To B’s Capital A/c \( 60,000 \)
(B) A’s Capital A/c Dr. \( 6,000 \); C’s Capital A/c Dr. \( 14,000 \) To B’s Capital A/c \( 20,000 \)
(C) A’s Capital A/c Dr. \( 36,000 \); C’s Capital A/c Dr. \( 24,000 \) To B’s Capital A/c \( 60,000 \)
(D) A’s Capital A/c Dr. \( 12,000 \); C’s Capital A/c Dr. \( 8,000 \) To B’s Capital A/c \( 20,000 \)
Answer: B

Question. P, Q and R share profits in the ratio of \( 5:4:3 \). R retires and the new ratio is \( 5 : 3 \). If R is given \( Rs 6,000 \) as goodwill, journal entry will be :
(A) P’s Capital A/c Dr. \( 1,000 \); Q’s Capital A/c Dr. \( 5,000 \) To R’s Capital A/c \( 6,000 \)
(B) P’s Capital A/c Dr. \( 5,000 \); Q’s Capital A/c Dr. \( 1,000 \) To R’s Capital A/c \( 6,000 \)
(C) P’s Capital A/c Dr. \( 3,750 \); Q’s Capital A/c Dr. \( 2,250 \) To R’s Capital A/c \( 6,000 \)
(D) P’s Capital A/c Dr. \( 3,333 \); Q’s Capital A/c Dr. \( 2,667 \) To R’s Capital A/c \( 6,000 \)
Answer: B

Question. X, Y and Z were partners in a firm sharing profits in the ratio of \( 3:2:1 \). X retired and the new profit sharing ratio between Y and Z will be \( 5 : 4 \). On X’s retirement the goodwill of the firm was valued at \( Rs 54,000 \). Journal entry will be :
(A) Y’s Capital A/c Dr. \( 24,000 \); Z’s Capital A/c Dr. \( 30,000 \) To X’s Capital A/c \( 54,000 \)
(B) Y’s Capital A/c Dr. \( 15,000 \); Z’s Capital A/c Dr. \( 12,000 \) To X’s Capital A/c \( 27,000 \)
(C) Y’s Capital A/c Dr. \( 12,000 \); Z’s Capital A/c Dr. \( 15,000 \) To X’s Capital A/c \( 27,000 \)
(D) X’s Capital A/c Dr. \( 27,000 \) To Y’s Capital A/c \( 12,000 \) To Z’s Capital A/c \( 15,000 \)
Answer: C

Question. A, B and C are partners sharing profits in the ratio of \( 3 : 4 : 5 \). B retires and the goodwill of the firm is valued at \( Rs 42,000 \). A and C decide to share profits in the ratio of \( 3 : 4 \). Journal entry will be :
(A) A’s Capital A/c Dr. \( 6,000 \); C’s Capital A/c Dr. \( 8,000 \) To B’s Capital A/c \( 14,000 \)
(B) A’s Capital A/c Dr. \( 7,500 \); C’s Capital A/c Dr. \( 6,500 \) To B’s Capital A/c \( 14,000 \)
(C) A’s Capital A/c Dr. \( 22,500 \); C’s Capital A/c Dr. \( 19,500 \) To B’s Capital A/c \( 42,000 \)
(D) B’s Capital A/c Dr. \( 14,000 \) To A’s Capital A/c \( 7,500 \) To C’s Capital A/c \( 6,500 \)
Answer: B

Question. P, Q and R were partners sharing profits in the ratio \( 5 : 3 : 2 \) respectively. P retires from the firm and Q and R decide to share future profits equally. Goodwill is valued at \( Rs 50,000 \). Adjustment entry for goodwill will be :
(A) Q’s Capital A/c Dr. \( 15,000 \); R’s Capital A/c Dr. \( 10,000 \) To P’s Capital A/c \( 25,000 \)
(B) Q’s Capital A/c Dr. \( 20,000 \); R’s Capital A/c To Dr. \( 30,000 \) T’s Capital A/c \( 50,000 \)
(C) Q’s Capital A/c Dr. \( 12,500 \); R’s Capital A/c Dr. \( 12,500 \) To P’s Capital A/c \( 25,000 \)
(D) Q’s Capital A/c Dr. \( 10,000 \); R’s Capital A/c Dr. \( 15,000 \) To P’s Capital A/c \( 25,000 \)
Answer: D

Question. X, Y and Z are partners sharing profits in the ratio of \( 2 : 3 : 5 \). Goodwill already appearing in their books at a value of \( Rs 60,000 \). X retires and Y and Z decided to share future profits equally. Journal entry will be :
(A) Y’s Capital A/c To X’s Capital A/c Dr. \( 12,000 \text{ } 12,000 \)
(B) X’s Capital A/c To Y’s/Z’s Capital A/c Dr. \( 60,000 \text{ } 60,000 \)
(C) X’s Capital A/c Dr. \( 2,400 \); Y’s Capital A/c Dr. \( 3,600 \); Z’s Capital A/c To Goodwill A/c Dr. \( 6,000 \text{ } 12,000 \)
(D) X’s Capital A/c Dr. \( 12,000 \); Y’s Capital A/c Dr. \( 18,000 \); Z’s Capital A/c Dr. \( 30,000 \)
Answer: D

Question. A, B and C are partners in a firm sharing profit/loss in the ratio of \( 2 : 2 : 1 \). On March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2018 was \( Rs 6,00,000 \) and the profits were \( 60,000 \). The sales for the period from Jan. 1, 2019 to March 31, 2019 were \( 2,00,000 \). The share of deceased partner in the current year’s profits on the basis of sales is :
(A) \( Rs 20,000 \)
(B) \( Rs 8,000 \)
(C) \( Rs 3,000 \)
(D) \( Rs 4,000 \)
Answer: D

Question. A, B and C were partners sharing profits and losses in the ratio of \( 2 : 2 : 1 \). Books are closed on 31st March every year. C dies on 5th November, 2018. Under the partnership deed, the executors of the deceased partner are entitled to his share of profit to the date of death, calculated on the basis of last year’s profit. Profit for the year ended 31st March, 2018 was \( Rs 2,40,000 \). C’s share of profit will be :
(A) \( Rs 28,000 \)
(B) \( Rs 32,000 \)
(C) \( Rs 28,800 \)
(D) \( Rs 48,000 \)
Answer: C

Question. P, Q and R were partners sharing profits in the ratio of their Capital ‘contribution which were \( Rs 6,00,000 \); \( Rs 4,00,000 \) and \( Rs 5,00,000 \) respectively. Their books are closed on 31st March every year. P dies on 24th August, 2018. Under the partnership deed, deceased partner is entitled to his share of profit/loss to the date of death based on the average profits of preceding three years. Profits were 2015 \( Rs 50,000 \); 2016 \( Rs 1,20,000 \) (Loss); 2017 \( Rs 30,000 \) and 2018 \( Rs 60,000 \). P’s share of profit/loss will be:
(A) \( Rs 3,200 \)
(B) \( Rs 6,400 \)
(C) \( Rs 12,000 \)
(D) \( Rs 4,800 \)
Answer: D