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

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 profits and losses in the ratio of 3 : 2 :1. On 1.3.2016 C died. The average profits of the firm for last four years were ₹ 72,000 Books are closed on 31st December. C’s share of profit till the date of his death will be:
(a) ₹ 2,000
(b) ₹ 12,000
(c) ₹ 1,400
(d) ₹ 24,000

Answer : A

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 options

Answer : A

Question.Retiring partner is compensated by the continuing partners in their
(a) Gaining Ratio.
(b) Capital Ratio.
(c) Sacrificing Ratio.
(d) Profit-sharing Ratio.

Answer : A

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 options

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. 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 : A

Question. Himanshu and Naman share profits & losses equally. Their capitals were Rs.1,20,000 and Rs. 80,000 respectively. There was also a balance of Rs. 60,000 in General reserve and revaluation gain amounted to Rs. 15,000. They admit friend Ashish with 1/5 share. Ashish brings Rs.90,000 as capital. Calculate the amount of goodwill of the firm.
(a) Rs.1,00,000
(b) Rs. 85,000
(c) Rs.20,000
(d) None of the options

Answer : B

Question. Yash and Manan are partners sharing profits in the ratio of 2:1. They admit Kushagra into partnership for 25% share of profit. Kushagra acquired the share from old partners in the ratio 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. Aryaman and Bholu are partners sharing profit and losses in ratio of 5:3. Chirag 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. Revaluation Account is a ———— Account.
(a) Real
(b) Nominal
(c) Personal
(d) Liability

Answer : B

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. Gaining ratio is used to distribute —————— in case of retirement of a partner.
(a) Goodwill
(b) Revaluation Profit or Loss
(c) Profit and Loss Account (Credit Balance)
(d) Both b and c

Answer : A

Question. X, Y and Z are partners in a firm. Y retires and his claim including his capital and his share of goodwill is R. 1,20,000. He is paid partly in cash and partly in kind. A vehicle at Rs. 60,000 unrecorded in the books of the firm and the balance in cash is given to him to settle his account. The amount of cash to be paid to Y will be:
(a) Rs. 80,000
(b) Rs. 60,000
(c) Rs. 40,000
(d) Rs. 30,000

Answer : A

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 Yand Z will be 5 : 4. On Xs retirement the goodwill of the firm was valued at ₹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. 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) None of the options
(b) The new profit sharing ratio
(c) The capital ratio
(d) The old profit sharing ratio

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 31 st 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.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.Choose the odd one:
(a) Revaluation Account
(b) Realisation of assets.
(c) Adjustment of goodwill.
(d) Gaining ratio.

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. 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. The firm of P, Q and R with profit sharing ratio of 6:3:1, had the balance in General Reserve Account amounting Rs. 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 Rs. 54,000
(b) P will be debited by Rs. 54,000
(c) P will be credited by Rs. 36.000
(d) P will be credited by Rs. 36,000

Answer : A

Question. A and B were partners. They shared profits as A- ½; B- 1/3 and carried to reserve 1/6. B died. The balance of reserve on the date of death was Rs. 30,000. B’s share of reserve will be:
(a) Rs. 10,000
(b) Rs. 8,000
(c) Rs. 12,000
(d) Rs. 9,000

Answer : C

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.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

Question.On the retirement of Hari from the firm of Hari, Ram and Sharma, the Balance Sheet showed a debit balance of Rs. 12,000 in the Profit and Loss Account. For calculating the amount payable to Hari, this balance will be transferred
(a) to the credit of the Capital Accounts of Hari, Ram and Sharma equally.
(b) to the debit of the Capital Accounts of Hari, Ram and Sharma equally.
(c) to the debit of the Capital Accounts of Ram and Sharma equally.
(d) to the credit of the Capital Accounts of Ram and Sharma equally.

Answer : B

Question. Heena and Sudha share Profit & Loss equally. Their capitals were Rs.1,20,000 and Rs. 80,000 respectively. There was also a balance of Rs. 60,000 in General reserve and revaluation gain amounted to Rs. 15,000. They admit friend Teena with 1/5 share. Teena brings Rs.90,000 as capital. Calculate the amount of goodwill of the firm.
(a) Rs.85,000
(b) Rs.1,00,000
(c) Rs.20,000
(d) None of the options

Answer : A

Question. At the time of admission of a partner, Employees Provident Fund is:
(a) Distributed to partners in the old profit sharing ratio
(b) Distributed to partners in the new profit sharing ratio
(c) Adjusted through gaining ratio
(d) None of the options

Answer : D

Question. At the time of admission of a new partner, the balance of Workmen Compensation Reserve 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.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 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 options

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.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. 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