CBSE Class 12 Accountancy Reconstitution of a Partnership Firm Retirement Death of a Partner Advanced Questions

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: 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 in a company sharing profit and loss in the ratio of 2:2:2. On March 31, 2018, C died. Accounts are closed on December 31st every year. The sale for the year 2017 was ₹6,00,000 and profits were ₹60,000. The sales for the period from Jan 1, 2018, to March 31, 2018, were ₹2,00,000. The share of the deceased partner in the current year’s profits on the basis of sale is
a) ₹20,000
b) ₹8,000
c) ₹3,000
d) ₹4,000

Answer: d

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: On death of a partner, his excutor is paid the profits of the deceased partner for the relevant period. This payment is recorded in Profit & Loss A/c :
a) Adjustment
b) Appropriation
c) Suspense
d) Reserve

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) The old profit sharing ratio
b) The new profit sharing ratio
c) The capital ratio
d) None of the options

Answer: a

Question: Revaluation account or Profit & loss adjustment account is
a) Real Account
b) Nominal Account
c) Personal Account
d) None of the options

Answer: b

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: P, Q and R were partners sharing profits in the ratio of their Capital ‘ contribution which were ₹6,00,000; ₹4,00,000 and ₹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 ₹50,000; 2016 ₹1,20,000 (Loss); 2017 ₹30,000 and 2018 ₹60,000. P’s share of profit/loss will be :
a) ₹3,200
b) ₹6,400
c) ₹12,000
d) ₹4,800

Answer: d

Question: On retirement of a partner, his capital account will be credited with
a) His/her share of goodwill.
b) His share in reserves and surplus.
c) His share of profit in revaluation
d) All of the above

Answer: d

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: A, B are C are sharing profits in the ratio of \(\frac{1}{2}: \frac{1}{3} \div \frac{1}{6}\) C retired. Gaining ratio will be :
a) 2 : 1
b) 2 : 3
c) 3 : 2
d) 1 : 2

Answer: c

Answer: Old partnership is reconstituteQuestion: 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 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: 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) The Bank rate.
d) None of the above.

Answer: a

Question: A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. They had a Joint Life Policy of ₹ 3,00,000. Surrender value of JLP in Balance Sheet is ₹ 90,000. C dies what is share of each partner in JLP ?
a) ₹ 1,05,000 ; ₹ 70,000; ₹ 35,000
b) ₹ 45,000 ; ₹ 30,000; ₹ 15,000
c) ₹ 1,50,000 ; ₹ 1,00,000 ; ₹ 50,000
d) ₹ 1,95,000 ; ₹ 1,30,000 ; ₹ 65,000

Answer: c

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: a

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: 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: Revaluation Account is prepared at the time of …………
a) Admission of a partner
b) Retirement of a partner
c) Death of a partner
d) All of the above

Answer: d

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: 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, profit on revaluation will be credited to:
a) Capital Account of retiring partner
b) Capital Account of remaining partners
c) Capital Account of all partners

Answer: c

Question: How unrecorded assets are treated at the time of retriement of a partner ?
a) Credited to Revaluation Account
b) Credited to Capital Account of Retiring Partner
c) Debited to Revaluation Account
d) Credited to Partner’s Capital Accounts

Answer: a

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: On retirement of a partner, goodwill will be credited to the Capital Account of:
a) Remaining Partners
b) Retiring Partner
c) All Partners
d) None of the Above

Answer: b

Question: A, B, and C share profits and losses of the company equally. B retires form 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) 1:1
b) 2:2
c) 7:8
d) 3:5

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: 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