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