Xii Mcqs CH - 5 Admission of Partner and Retirement

CH – 5: Multiple Choice Questions/Objective Type Questions: Admission of a Partner
Q. 1 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
Q. 2 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 above
Q. 3 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
Q. 4 “At the time of admission, old partnership comes to an end”. Is the statement true or false?
Q. 5 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 above
Q. 6 Yash and Manan are partners sharing profits in the ratio of2:1. 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
Q. 7 A and B are partners sharing profit and losses in ratio of 5:3. C is admitted for 1/4 th 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
Q. 8 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
Q. 9 “As per Section 26 of the Indian Partnership Act, 1932, a person can be admitted as a new
partner if it is agreed in the Partnership Deed”. Is the statement True or False?
Q. 10 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
Q. 11 As per ---------, only purchased goodwill can be shown in the Balance Sheet.
a) AS 37
b) AS 26
c) Section 37
d) AS 37
Q. 12 “A newly admitted partner cannot pay his share of the goodwill to the sacrificing partners
privately”. Is the statement True or False?
Q. 13 “Unless agreed otherwise, Sacrificing Ratio of the old partners will be the same as their
Old Profit Sharing Ratio”. Is the statement True or False?
Q. 14 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
Q. 15 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
Q. 16 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
Q. 17 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
Q. 18 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
Q. 19 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
Q. 20 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
Q. 21 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
Q. 22 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 above
Q. 23 Revaluation Account is a ------------ Account.
a) Real
b) Nominal
c) Personal
d) Liability
Q. 24 Match the following:
i. Sacrificing Ratio A Nominal Account

ii. Gaining Ratio B Reconstitution of Partnership
iii. Revaluation Account C New Ratio – Old Ratio
iv. Admission of a Partner D Old Ratio – New Ratio
a) i- B, ii-C, iii-A, iv-D

b) i- D, ii-B, iii-A, iv-C
c) i- D, ii-C, iii-A, iv-B
d) i- D, ii-C, iii-B, iv-A
Q. 25 Match the following with respect to journal entries for treatment of goodwill.
i. Incoming partner brings his share of A No Entry

goodwill
ii. Incoming partner does not bring his share B Premium for Goodwill A/c Dr.
of goodwill Incoming Partner’s Capital A/c Dr.
To Sacrificing Partners Capital A/c
iii. Incoming partner pays his share of C Premium for Goodwill A/c Dr.
goodwill privately To Sacrificing Partners Capital A/c
iv. Incoming partner brings only a part of his D Incoming Partner’s Capital A/c Dr.
share of goodwill To Sacrificing Partners Capital A/c
a) i- B, ii-C, iii-A, iv-D

b) i- C, ii-D, iii-A, iv-B
c) i- D, ii-C, iii-A, iv-B
d) i- D, ii-C, iii-B, iv-A
Answers
1. b
2. a
3. a
4. True
5. b
6. c
7. c
8. a
9. False
10.c
11.b
12. False
13. True
14.c
15.d
16.a
17.a
18.a
19.a
20.a
21.c
22.c
23.b
24.c
25. b

Xii Mcqs CH - 5 Admission of Partner and Retirement

Uploaded by

Copyright:

Available Formats

Xii Mcqs CH - 5 Admission of Partner and Retirement

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Xii Mcqs CH - 5 Admission of Partner and Retirement

Uploaded by

Copyright:

Available Formats

CH – 5: Multiple Choice Questions/Objective Type Questions: Admission of a Partner

Q. 1 Which of the following is not the reconstitution of partnership?

Q. 2 On the admission of a new partner:

a) Old partnership is dissolved

Q. 3 Sacrificing ratio is used to distribute ------------------ in case of admission of a partner.

Q. 10 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.

Q. 15 At the time of admission of a partner, Employees Provident Fund is:

Q. 17 At the time of admission of a new partner, the balance of Workmen Compensation

Q. 24 Match the following:

i. Sacrificing Ratio A Nominal Account

a) i- B, ii-C, iii-A, iv-D

i. Incoming partner brings his share of A No Entry

a) i- B, ii-C, iii-A, iv-D

You might also like