CBSE Class 12 Accountancy Retirement or Death of a Partner MCQs Set 04

Question: Revaluation account is prepared at the time of :
a) Admission of partner
b) Retirement of a partner
c) Death of a partner
d) Reconstitution of the firm
Answer: d

Question: Gaining ratio is calculated at the time of
a) Admission of a partner
b) Retirement of a Partner
c) Dissolution of a partnership firm
d) Both (a) and (c)
Answer: b

Question: Gain of Revaluation at the time of retirement is transferred to:
a) All Partners
b) Outgoing partner
c) Remaining Partner
d) Retiring Partner
Answer: a

Question: Share of goodwill of the retiring partner is debited to remaining partners in their
a) Old ratio
b) New ratio
c) Gaining ratio
d) Sacrificing ratio
Answer: c

Question: A, B, C are partners sharing profit and losses in the ratio of 4:3:1. B retires and gives his share of profit to A ₹3,600 and C ₹4,500. What is the gaining ratio of A and C?
a) 4:5
b) 2:1
c) 68:48
d) 4:1
Answer: a

Question: Amount due to outgoing partner is shown on the balance sheet as his
a) Liability
b) Asset
c) Capital
d) Loan
Answer: d

Question: In which ratio retiring partner is compensated by the continuing partners for his share of goodwill?
a) Gaining ratio
b) Sacrificing ratio
c) Old ratio
d) New ratio
Answer: a

Question: An account prepared to ascertain the gain or loss at the time of death of a partner is called
a) Realisation Account
b) Executors Account
c) Revaluation Account
d) Deceased Partner Account
Answer: c

Question: P, Q and R share profits in the ratio of 8:5:3. Q retires from the firm. P gives 3/16 to Q and R gives 5/16 to Q. New profit-sharing ratio between P and R will be
a) 1:1
b) 10:6
c) 9:7
d) 5:3
Answer: a

Question: If Goodwill is appearing in the balance sheet, it will be credited to
a) Gaining partner
b) Retiring partners
c) All partners
d) Remaining Partners
Answer: c

Question: Revaluation account is prepared to calculate gain or loss at the time of
a) Admission of partner
b) Retirement of a partner
c) Death of a partner
d) All of the above
Answer: d

Question: Outgoing partner gives his share of profit to remaining partners. In what ratio do the remaining partners contribute this compensation amount?
a) Gaining ratio
b) Capital ratio
c) Sacrificing ratio
d) Old profit-sharing ratio
Answer: a

Question: A, B and C are partners in a firm sharing profits and losses in 3:4:2. B retires. The profit on revaluation is ₹72,000. New ratio between A and C is 5:3. Profit on revaluation will be distributed as:
a) A ₹32,000, B ₹24,000, C ₹16,000
b) A ₹24,000, B ₹32,000, C ₹16,000
c) A ₹45,000, C ₹27,000
d) A ₹47,250, C ₹24,750
Answer: b

Question: In the event of death of a partner, Employees’ Provident Fund appearing in the balance sheet will be shown in
a) Capital A/c (Cr.)
b) Capital A/c (Dr.)
c) Liability side [Balance Sheet]
d) Asset side [Balance Sheet]
Answer: c

Question: A, B, C are partners sharing profit as 5:3:2. A dies. B and C will compensate A’s executor for goodwill. Goodwill is 2 years’ purchase of the last 3 years’ average profit. Profits were ₹3,28,000, ₹3,46,000, and ₹4,00,000. How much will B and C pay?
a) ₹3,16,000 and ₹1,42,000
b) ₹2,44,000 and ₹2,16,000
c) ₹4,29,600 and ₹2,86,400
d) ₹2,16,000 and ₹1,44,000
Answer: c

Question: A, B and C are partners with profit and losses in the ratio of 4:3:2. B retires. If A and C share B’s profit in 5:3, then the new profit-sharing ratio will be
a) 47:25
b) 17:11
c) 31:11
d) 14:21
Answer: a

Question: If the retiring partner is not paid full amount due to him immediately on retirement, his balance is transferred to his
a) Loan A/c
b) Capital A/c
c) Bank A/c
d) Suspense A/c
Answer: a

Question: A, B and C were partners sharing profit and losses in the ratio of 3:2:1. Books close on 31st March every year. C dies on 30th November 2018. Last year’s profit was ₹2,40,000. C’s share of profit till death will be
a) ₹26,667
b) ₹40,000
c) ₹30,000
d) ₹53,333
Answer: a

Question: A, B & C are partners sharing profits in ratio 3:2:1. C retires. Total capital of new firm is fixed at ₹60,000. What will be the new capitals of A and B?
a) ₹30,000 and ₹30,000
b) ₹24,000 and ₹36,000
c) ₹36,000 and ₹24,000
d) ₹40,000 and ₹20,000
Answer: c

Question: Claim of the retiring partner is payable in the following form
a) Fully in cash
b) Fully transferred to loan A/c to be paid later with some interest on it
c) Partly in cash and partly as loan repayable later with agreed interest
d) Any of the above method
Answer: d

Question: A, B and C are partners sharing profits in the ratio 2:2:1. B retires from the firm. The capital account of A, B and C are Rs. 60,000, Rs. 70,000 and Rs. 50,000 respectively after adjustment of goodwill, reserve and revaluation. B was to be paid in cash brought in by A and C in such a way that their capitals are in proportion of new ratio. How much amount A and C must bring to pay B?
a) Rs. 50,000 by A & Rs. 20,000 by C
b) Rs. 60,000 by A & Rs. 10,000 by C
c) Rs. 35,000 by A & Rs. 35,000 by C
d) Rs. 40,000 by A & Rs. 30,000 by C
Answer: B

Question: A, B and C sharing profit in ratio 3:2:1, C retires from the firm. Goodwill is to be valued at Rs. 60,000. Find the amount payable to retiring partner on account of goodwill.
a) Rs. 30,000
b) Rs. 20,000
c) Rs. 10,000
d) Rs. 60,000
Answer: B

Question: At the time of death of a partner, general reserve appearing in the balance sheet should be credited to:
a) All partners including deceased partner in their old profit sharing ratio
b) Remaining partners in the new profit sharing ratio
c) Neither the deceased nor the remaining partners
d) Remaining partners in gaining ratio
Answer: A

Question: Retiring or outgoing partner:
a) Is liable for firm liabilities
b) Not liable for any liabilities of the firm
c) Is liable for obligations incurred before his retirement
d) Is liable for obligations incurred before and after his retirement
Answer: C

Question: P, Q and R are partners 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. What will be the new profit sharing ratio?
a) 1:1
b) 10:6
c) 9:7
d) 5:3
Answer: A

Question: X, Y and Z are partners sharing profits and losses in the ratio of 4:3:2. Y retires and surrenders 1/9th of his share in favour of X and the remaining in favour of Z. The new profit sharing ratio will be:
a) 1:8
b) 13:14
c) 8:1
d) 14:13
Answer: B

Question: At the time of retirement of a partner, share of retiring partner’s goodwill will be credited to —————- Capital Account(s).
a) Remaining Partner(s)
b) Retiring Partner’s
c) Both Sacrificing and Gaining Partner(s)
d) Gaining Partner(s)
Answer: B

Question: On retirement of a partner, debtors of Rs. 34,000 were shown in the Balance sheet. Out of this Rs. 4,000 became bad. One debtor became insolvent. 70% were recovered from him out of Rs. 10,000. Full amount is expected from the balance debtors. On account of this item loss in revaluation account will be:
a) Rs. 10,200
b) Rs. 3,000
c) Rs. 7,000
d) Rs. 4,000
Answer: C

Question: As per Section 37 of the Indian Partnership Act, 1932, interest @ ———– is payable to the retiring partner if full or part of his dues remain unpaid.
a) 9% p.m.
b) 12% p.m.
c) 6% p.m.
d) None of the above
Answer: D

Question: A, B and C were partners. Their partnership deed provided that they were to share profits as: A 26%, B 34%, C 40%; and that if a partner retires, his capital should remain in the business for a stated period at a fixed rate of interest, but that the retiring partner’s share should be credited with an amount for goodwill, based upon one and a half year’s average profits, for the five years prior to his retirement, subject to deduction of 5% from the book debts. C retired, and the profits of the firm for five years were agreed at Rs. 20,000; Rs. 30,000; Rs. 15,000 (loss); Rs. 5,000 (loss); and Rs. 45,000 respectively. Book debts stood at Rs. 90,000. The share of goodwill to be credited to C’s Account will be:
a) Rs. 2,700
b) Rs. 6,300
c) Rs. 7,200
d) Rs. 3,600
Answer: C

Question: If goodwill is already appearing in the books of accounts at the time of retirement, then it should be written off in ————-.
a) New Ratio
b) Gaining Ratio
c) Sacrificing Ratio
d) Old Ratio
Answer: D

Question: If at the time of retirement, there is some unrecorded asset, it will be ————- to ————- Account.
a) Debited, Revaluation
b) Credited, Revaluation
c) Debited, Goodwill
d) Credited, Partners’ Capital
Answer: B

Question: When the balance sheet is prepared after retirement (subsequent to preparation of Revaluation Account), ————- values are shown in it.
a) Historical
b) Realisable
c) Market
d) Revalued
Answer: D

Question: X,Y and Z were partners in a firm sharing profits in ratio of 3:4:1 X retired and new profit sharing ratio between Y and Z will be 5 :4 .On X’s retirement the goodwill of the firm was valued at ₹̈́ 54,000 .journal entry will be:
(A) Y’s capital Dr. 24,000
Z’s capital Dr. 30,000
X’s capital 54,000
(B) Y’s capital Dr. 15,000
Z’s capital Dr. 12,,000
X’s capital 27000
(C) Y’s capital Dr. 12,000
Z’s capital Dr. 15,000
X’s capital 27,000
(D) X’s capitals a/c Dr. 27,000
To Y’s capitals 12,000
To Z’s capitals 15,000
Answer: C

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) Sacrificing Ratio
c) Capital Ratio
d) Profit Sharing Ratio
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: Anil, Bimal and Chetan are partners sharing their profits and losses in the ratio of 4:3:2. On 1.7.2013, Chetan retired and on that date the capitals of Anil, Bimal and Chetan after all necessary adjustments stood at Rs. 75,000, Rs. 65,000 and Rs. 45,000 respectively. Anil and Bimal continued to carry the business for 6 months without settling Chetan’s account. During the period of six months ending 31st December, 2013, a profit of Rs. 50,000 is earned by the firm. Keeping Chetan’s interest in mind, the amount payable to Chetan will be:
a) Rs. 1,350
b) Rs. 13,362
c) Rs. 12,162
d) Rs. 1,362
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: At the time of retirement, amount remaining in Investment Fluctuation Reserve after meeting the fall in value of Investment is:
a) Credited in Sacrificing Ratio
b) Credited in New Profit Sharing Ratio
c) Credited in Old Profit Sharing Ratio
d) Credited in Gaining Ratio
Answer: c

Question 1. On the retirement of a partner, profit on revaluation of assets and liabilities should be credited to the Capital Accounts of:
(a) Retiring partner in their old ratio
(b) All partners in their old ratio
(c) Remaining partners in new ratio
(d) Remaining partners in old ratio
Answer: (b) All partners in their old ratio
In simple words: When assets and liabilities are revalued at the time of a partner's retirement, the profit or loss from this revaluation belongs to all partners — not just those staying on. This profit or loss is shared based on their old profit-sharing ratio, which was in effect before the retirement.

Exam Tip: Revaluation gains or losses arise during the partner's tenure, so all partners who shared in the old ratio benefit or bear the loss equally according to that ratio.

Question 2. 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, the 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) to the debit of the capital accounts of Hari, Ram and Sharma equally
In simple words: A debit balance in Profit and Loss Account represents a loss that must be shared by all partners according to their profit-sharing ratio. Since the question suggests equal sharing, all three partners bear this loss equally by debiting their capital accounts.

Exam Tip: A debit balance (loss) in Profit and Loss Account is always debited to partners' capital accounts in their profit-sharing ratio at the time of retirement.

Question 3. At the time of retirement of Manu, from the firm of Shahid, Arora and Manu the balance sheet showed a workmen compensation reserve of Rs 15,000 on the liabilities side after meeting the employees compensation liabilities thereof. For calculating the amount payable to Manu, the balance will be transferred:
(a) to the credit of the capital accounts of Manu only
(b) to the credit of the capital accounts of Manu, Arora and Shahid
(c) to the debit of the capital accounts of Manu, Arora and Shahid
(d) to the credit of the capital accounts of Arora and Shahid only
Answer: (b) to the credit of the capital accounts of Manu, Arora and Shahid
In simple words: The workmen compensation reserve is an asset (even though listed on the liabilities side) that now becomes surplus after the compensation is paid. This gain or reserve is shared by all partners in their profit-sharing ratio — including Manu, who is retiring. All three capital accounts get credited.

Exam Tip: Reserves and provisions that are no longer needed are treated as gains and credited to all partners in their profit-sharing ratio, regardless of who is retiring.

Question 4. On the retirement of a partner, reserves should be transferred to the Capital Accounts of:
(a) Retiring partner
(b) Remaining partners
(c) All partners
(d) None of these
Answer: (c) All partners
In simple words: Reserves are built up over time by all partners through their collective efforts. When one partner retires, these reserves must be split among all partners — including the retiring partner — based on their profit-sharing ratio.

Exam Tip: Always remember that reserves, like profits, belong to all partners and must be distributed according to the old profit-sharing ratio at the time of retirement.

Question 5. Credit balance of Profit and Loss Account appearing in the Balance Sheet on the death of a partner is credited to:
(a) Deceased partner's capital account
(b) All partner's capital accounts (including deceased partner's capital account)
(c) Remaining partner's capital account
(d) None of the above
Answer: (b) All partner's capital accounts (including deceased partner's capital account)
In simple words: A credit balance in the Profit and Loss Account shows a profit. This profit was earned by all partners working together, so it belongs to everyone — including the deceased partner. Each partner's capital account is credited according to their share in this profit.

Exam Tip: Balances in Profit and Loss Account (whether credit or debit) are always distributed to all partners in their profit-sharing ratio, not just the remaining or retiring partners.

Question 6. P, Q and R are partners sharing profits in the ratio of 4:3:1. P retires and his share is taken up by Q and R equally. Calculate new profit-sharing ratio of Q and R.
(a) 1 : 1
(b) 4 : 3
(c) 3 : 4
(d) 5 : 3
Answer: (d) 5 : 3
In simple words: P's share is 4/8 of the total. When Q and R take this equally, each gets 2/8 more. Q's new share becomes 3/8 + 2/8 = 5/8, and R's becomes 1/8 + 2/8 = 3/8. The ratio is 5:3.

Exam Tip: When a retiring partner's share is taken up by remaining partners, add their gain to their old share to find the new ratio.

Question 7. In case of death of a partner, the whole amount standing to the credit of his Capital Account is transferred to:
(a) Capital Accounts of all partners
(b) Capital Accounts of remaining partners
(c) His executor's account
(d) Revenue Account of the Government
Answer: (c) His executor's account
In simple words: When a partner dies, the balance in his capital account is transferred to an account opened in the name of his executor or legal heir. This account represents the amount due to the deceased partner's estate and needs to be settled separately.

Exam Tip: The executor's account is a holding account that tracks the amount payable to the deceased partner's heirs before final settlement.

Question 8. A, B and C share profits in the ratio of 1/2, 3/10 and 1/5. C dies. The gaining ratio of A and B will be:
(a) 1 : 1
(b) 1 : 3
(c) 5 : 3
(d) 3 : 1
Answer: (a) 1 : 1
In simple words: C's share is 1/5 = 2/10. A had 1/2 = 5/10 and B had 3/10. When A and B take C's share equally, each gains 1/10. The gaining ratio is equal, so it is 1:1.

Exam Tip: Gaining ratio shows how much of the retiring or deceased partner's share each remaining partner receives. Calculate the exact gain for each partner and express it as a ratio.

Question 9. On retirement of a partner, the continuing partners' capital accounts are debited with retiring partner's share of goodwill in
(a) Old profit-sharing ratio
(b) Gaining ratio
(c) New profit-sharing ratio
(d) Equal ratio
Answer: (b) Gaining ratio
In simple words: When goodwill is paid to the retiring partner, the continuing partners must contribute toward this payment. They do so in the ratio in which they gain from the retirement — that is, the gaining ratio — not any other ratio.

Exam Tip: The gaining ratio is used to debit the remaining partners' capital accounts for goodwill because it reflects how much each one benefits from the retiring partner's departure.

Question 10. Neetu, Seetu and Keetu have been sharing profit in the ratio of 3:5:7 respectively. Keetu retires and his share is taken up by Neetu and Seetu in the ratio of 3:2, the new ratio will be:
(a) 12:13
(b) 3:5
(c) 2:1
(d) 3:2
Answer: (a) 12:13
In simple words: Keetu's share is 7/15. Neetu gets 3/5 of this (which is 7/15 × 3/5 = 21/75) and Seetu gets 2/5 of this (which is 7/15 × 2/5 = 14/75). Neetu's new share is 3/15 + 21/75 = 36/75, and Seetu's is 5/15 + 14/75 = 39/75. The ratio is 36:39 or 12:13.

Exam Tip: When a retiring partner's share is taken in a specific ratio, apply that ratio to the share being taken up and add it to each remaining partner's old share.

Question 11. If at the time of retirement, there is some unrecorded liability, it will be:
(a) Debited to Revaluation A/c
(b) Credited to Revaluation A/c
(c) Transferred to Old Partner's Capital A/cs
(d) Transferred to All Partners' Capital A/cs
Answer: (a) Debited to Revaluation A/c
In simple words: An unrecorded liability is an obligation that was not shown in the books but exists. This liability must be recorded and shared among all partners. It is debited to the Revaluation Account so it can be distributed to each partner's capital account in their profit-sharing ratio.

Exam Tip: Unrecorded liabilities and hidden expenses are always debited to Revaluation Account; unrecorded assets and hidden income are credited.

Question 12. The gain of remaining partners is equal to:
(a) Their new share
(b) Their old share
(c) New share - Old share
(d) Old share - New share
Answer: (c) New share - Old share
In simple words: The gain a remaining partner makes is the difference between what they own after the retirement and what they owned before. This is found by taking the new share and subtracting the old share.

Exam Tip: Gain is always calculated as (New Share - Old Share). If the result is positive, the partner gains; if negative, they lose, which means goodwill must be paid.

Question 13. Which of the following is debited to partners' capital accounts at the time of retirement of a partner?
(a) General Reserve
(b) Profit on revaluation
(c) Accumulated losses
(d) Accumulated profits
Answer: (c) Accumulated losses
In simple words: When a partner retires, accumulated losses reduce the partners' capital accounts because losses represent a reduction in the firm's net worth that must be shared among all partners based on their profit-sharing ratio.

Exam Tip: Remember that losses and expenses are debited to capital accounts, while reserves and profits are credited. This is a fundamental rule in partnership accounting.

Question 14. At the time of retirement of a partner, Workmen Compensation Reserve after meeting the legal requirement, is transferred to:
(a) Revaluation Account
(b) All Partners' Capital Account
(c) Sacrificing Partners' Capital A/cs
(d) Old Partners' Capital Account
Answer: (b) All Partners' Capital Account
In simple words: The Workmen Compensation Reserve is a reserve created for all partners' benefit, so after it meets legal requirements, it gets credited to all partners' capital accounts in their profit-sharing ratio.

Exam Tip: Reserves built up by the firm belong to all partners collectively, so they are always distributed among all partners' capital accounts in their old profit-sharing ratio.

Question 15. On the retirement of a partner increase in the value of assets is recorded in:
(a) Revaluation A/c
(b) Cash A/c
(c) Old Partners' Capital A/cs
(d) None of the above
Answer: (a) Revaluation A/c
In simple words: When assets go up in value at retirement, this gain is first recorded in the Revaluation Account. Then it gets passed on to all partners' capital accounts based on how they shared profits.

Exam Tip: The Revaluation Account is a temporary account created at retirement or death to capture all gains and losses from revaluing the firm's assets and liabilities.

Question 16. The purpose of preparation of revaluation account is:
(a) to find out gross profit
(b) to find out net profit
(c) to find out financial position
(d) to find out results of revaluation of assets and liabilities
Answer: (d) to find out results of revaluation of assets and liabilities
In simple words: The Revaluation Account shows the total gain or loss from changing the values of the firm's assets and liabilities when a partner retires or passes away. It helps measure exactly how much the firm's position has changed.

Exam Tip: Revaluation Account is NOT about profit from business operations - it only deals with changes in asset and liability values.

Question 17. In the absence of any provision in the partnership deed, interest on amount remaining unpaid to the executor of deceased partner:
(a) will not be allowed
(b) will be allowed @ 6% p.a.
(c) will be allowed even if there are no losses
(d) will be allowed @ 5% p.a.
Answer: (b) will be allowed @ 6% p.a.
In simple words: Under the Indian Partnership Act, 1932, when no agreement exists about interest, the law says interest at 6% per year is automatically due on any unpaid balance owed to the deceased partner's estate.

Exam Tip: This 6% default rate comes from Section 37 of the Partnership Act - always remember this statutory provision when the partnership deed is silent.

Question 18. On the death of a partner, his share in the profits of the firm till the date of his death is transferred to the:
(a) Debit of Profit and Loss Account
(b) Credit of Profit and Loss Account
(c) Debit of Profit and Loss Suspense Account
(d) Credit of Profit and Loss Suspense Account
Answer: (d) Credit of Profit and Loss Suspense Account
In simple words: When a partner dies, the profit earned up to that date is temporarily held in the Profit and Loss Suspense Account on the credit side. This keeps track of money owed to the deceased's family.

Exam Tip: The Suspense Account temporarily holds the deceased partner's share - it is later moved to the executor's loan account or capital account when settlement happens.

Question 19. As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment of the final amount due to the deceased partner at the rate of:
(a) 6% p.a.
(b) 7% p.a.
(c) 8% p.a.
(d) 10% p.a.
Answer: (a) 6% p.a.
In simple words: Section 37 of the Partnership Act lets the executor choose to earn 6% interest per year on any unpaid balance owed to the deceased partner from the date of death until final payment.

Exam Tip: The executor has a choice - they can accept either the firm's profit share OR 6% interest, whichever is more beneficial. Always mention this choice aspect in your answer.

Question 20. M, N and P are partners in a firm, sharing profit in the ratio of 2:2:1. Their capital accounts stand as Rs. 1,00,000, Rs. 1,00,000 and Rs. 50,000 respectively. N retired from the firm and balance in the reserve on that date was Rs. 30,000. If goodwill of the firm is Rs. 60,000 and profit on revaluation is Rs. 14,100, what amount will be transferred to N's loan account?
(a) Rs. 1,41,640
(b) Rs. 17,640
(c) Rs. 1,01,640
(d) None of these
Answer: (a) Rs. 1,41,640
In simple words: N's final amount consists of N's opening capital (Rs. 1,00,000) plus N's share of profit from revaluation (Rs. 5,640) plus N's share of goodwill (Rs. 24,000) plus N's share of reserve (Rs. 12,000) = Rs. 1,41,640. This complete amount goes to N's loan account.

Exam Tip: Always calculate the retiring partner's final payment by adding: capital + share of reserves + share of goodwill + share of revaluation profit/loss. Any excess or deficit is transferred to their loan account.

Question: The balance in the capital account of the deceased partner is transferred to his _________ account.
Answer: Executor

Question: Share of goodwill of the decease partner is ________ to his capital account.
Answer: Credited

Question: The death of a partner, deceased partner share in the goodwill is divides equally among continuing partners.
Answer: False

Question: Market value of the business – net worth of the business = ________.
Answer: Goodwill

Question: The amount paid to the retiring partners is excess of his capital after adjusting accumulated profits/losses revaluation profits/losses, share of goodwill etc is taken as his share of hidden goodwill of the firm.
Answer: True

Question: Goodwill will be debited with the agrees value less already shown in the Balance sheet.
Answer: False

Question: The gaining partners should compensate the sacrificing partners to the extent of their gain for the respective share of goodwill.
Answer: True

Question: Share of goodwill of the deceased partner is _______ to his capital account.
Answer: Credited

Question: Goodwill may be written off in all the partners are in old profit sharing ratio.
Answer: True

Question: In case of death of a partner the profit may be estimated on the basis of ______ and_______.
Answer: Time, Sales

Question: In Death of a partner the share of profit of deceased partner is calculated either on time basis or on turnover basic.
Answer: True

Question: Goodwill is recorded in the books only when it is purchased.
Answer: True

Question: Goodwill will be debited with the agreed value_________ goodwill already shown in the book.
Answer: Less

Question: Death of a partner is like a compulsory retirement.
Answer: True

Question: The executor of the deceased partner is entitled to all the right of __________.
Answer: Deceased Partner

Question: Retiring partners’ share of goodwill is debited to his his/her capital account at the time of retirement.
Answer: False

Question: The executer is entitles to all the right of a __________.
Answer: Deceased Partner

Question: Interest on drawings due from deceased partner till the date of the death is _______ to his capital account.
Answer: Debit