# Unseen Passage

For Class 4 to Class 12

# Admission of a Partner MCQ Questions Class 12 Accountancy

Please refer to Chapter 3 Admission of a Partner MCQ Class 12 Accountancy with answers below. These multiple-choice questions have been prepared based on the latest NCERT book for Class 12 Accountancy. Students should refer to MCQ Questions for Class 12 Accountancy with Answers to score more marks in Grade 12 Accountancy exams. Students should read the chapter Admission of a Partner and then attempt the following objective questions.

## MCQ Questions Class 12 Accountancy Chapter 3 Admission of a Partner

Admission of a Partner MCQ Class 12 Accountancy provided below covers all important topics given in this chapter. These MCQs will help you to properly prepare for exams.

Question. When goodwill is not recorded in the books at all on admission of a partners ?
(a) If paid privately
(b) If brought in cash
(c) If not brought in cash
(d) If brought in Kind

Answer

A

Question. Calculate the value of goodwill at 3 years’ purchase when. Capital employed Rs.2,50,000; Average profit Rs. 30,000 and normal rate of return is I0%.
(a) Rs. 3000
(b) Rs. 25,000
(c) Rs. 30,000
(d) Rs. 5,000

Answer

D

Question. The net assets of the firm including fictitious assets of 5,000 are 85,000.The netliabilities of the firm are 30,000.The normal rate of return is 10% and the average profitsof the firm are 8,000.Calculate the goodwill as per capitalization of super profits.
(a) Rs.20,000
(b) Rs. 30,000
(c) Rs. 25,000
(d) None of the above

Answer

B

Question. The goodwill of the firm is not affected by.
(a) Location of the firm
(b) reputation of the firm
(c )Better customer services
(d) None of the above

Answer

B

Question. Following are the methods of calculating goodwill except.
(a) Super profit method
(b) Average profit method
(c) Weighted Average profit method
(d) Capital profit method

Answer

D

Question. Under which method of valuation of goodwill, normal rate of return is not considered?
(a) Loss on sale of fixed assets
(b) Loss due to fire, earthquake etc
(c) Undervaluation of closing stock
(d) All of the above

Answer

C

Question. Goodwill is _____
(a ) tangible asset
(b) intangible asset
(c) fictitious asset
(d) both (b) & (c)

Answer

B

Question. Weighted average profit method of calculating goodwill is used when.
(a) Profits are not equal
(b) Profits show a trend
(c) Profits are fluctuating
(d)None of the above

Answer

B

Question. What are super profits
(a) Actual profit – Normal Profit
(b) Normal Profit – Actual profit
(c) Actual profit + Normal Profit
(d) None of the above

Answer

A

Question. Which of the following items are added to previous year’s profits for finding normalprofits for valuation of goodwill.?
(a) Loss on sale of fixed assets
(b) Loss due to fire, earthquake etc
(c) Undervaluation of closing stock
(d) All of the above

Answer

D

Question. Goodwill of the firm on the basis of 2 years’ purchase of average profit of the last 3years is Rs. 25,000. Find average profit.
(a) Rs. 50,000
(b) Rs. 25,000
(c ) Rs. 10,000
(d) Rs. 2500

Answer

D

Question. When Goodwill is not purchased goodwill account can .
(a) Never be raised in the books
(b) Be raised in the books
(c) Be partially raised in the books
(d) Be raised as per the agreement of the partners

Answer

A

Question. Capital invested in a firm is 5,00,000.Normal rate of return is 10% .Average profit ofthe firm are 64,000(after an abnormal loss of 4,000).Value of goodwill at four times thesuper profits will be.
(a) Rs.72,000
(b) Rs. 40,000
(c) Rs. 2,40,000
(d) 1,80,000

Answer

A

Question. The excess amount which the firm can get on selling its assets over and above the saleable value of its assets is called .
(a) Surplus
(b) Super profits
(c) Reserve
(d) Goodwill

Answer

D

Question. If the new partner brings his share of goodwill in cash , it will shared by old partner in :
(a) Sacrificing ratio
(b) Old profit sharing Ratio
(c) New Ratio
(d) Capital ratio

Answer

A

Question. Arti & Amit Were Partners in a firm Sharing Profits & losses in the ratio of 2:1.Vipul was admitted as a new partner for 1/5th Share in profits.Vipul acquired 2/3rd of his share from Arti.The Share, which Vipul Acquired from Amit is _
(a) 2/15
(b) 1/15
(c) 1/9
(d) None of the above

Answer

B

Question. No.X & Y are partners in a firm. Z is admitted for 1/5th Share . If there in no Partnership Deed,the ratio in which X & Y sacrifice their share of profit in favour of new partner is _
(a) In the Ratio of capital
(b) Equally
(c) Either a or b
(d) None of the Above

Answer

B

Question. Revaluation Account is a :
(a) Real Account
(b) Nominal Account
(c) Personal Account
(d) None of the Above

Answer

B

Question. Hema & Seema were Partner in a firm sharing profits in the ratio of 3:1.Their Capitals Were Rs.4,00,000 and Rs.1,00,000/- respectively.They Admitted Dimple on 1st April 2021 for 1/5th share in future profits.Dimple Brought Rs.2,00,000/-as her capital.The Dimple’s share of goodwill is
(a) Rs.50,000/-
(b) Rs.60,000/-
(c) Rs.1,00,000/-
(d) None of the Abov

Answer

B

Question. Sun , Moon ,Star are partners in a partnership firm ,if Sky is admitted as a new partner –
(a) Old firm is dissolved .
(b) Old partnership and Old firm is dissolved .
(c) Old Partnership is reconstituted
(d) None of these.

Answer

C

Question. When new partner brings cash for goodwill , the amount is credited to :
(a) Realisation Account
(b) Cash account
(c) Premium for Goodwill Account
(d) Revaluation Account

Answer

C

Question. At the time of Admission of a new partner, the Goodwill already appears in the Balance Sheet of the firm is treated as –
(a) Debited in all partners’ Capital Accounts in new ratio .
(b) Debited in old partners ‘ Capital Accounts in old ratio .
(c) Credited in old partners’ Capital Accounts in old ratio .
(d) None of the Above

Answer

B

Question. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted C as a new partner . A sacrificed 1 / 5 th of his share and B sacrificed 1 / 5 th from his share in favour of C. C ‘s share in the profits of the firm will be –
(a) 5 / 25
(b) 8 / 25
(c) 6 / 25
(d) 2 / 5

Answer

B

Question. The balance in the investment Fluctuation fund after meeting the fall in book value of investment , at the time of admission of partner will transferred to :
(a) Revaluation Account
(b) Capital Account of old Partners
(c) General Reserve
(d) capital Account of All Partners

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 above

Answer

C

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 above

Answer

A

Question. A and B are Partners sharing Profits in the ratio of 3:2. They Admit C for ¼ share who contributed Rs 30,000 for his share of goodwill. The total value of the goodwill of the firm will be :
(a) Rs 1,50,000
(b) Rs 1,20,000
(c) Rs 1,00,000
(d) Rs 1,60,000

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 above

Answer

A

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 Credit Balance of Profits and Loss appears in the books at the time of admission of partner will be transferred to :
(a) Profit and loss appropriation account
(b) All partners capital Account
(c) Old partners capital Account
(d) Revaluation Account

Answer

C

Question. On admission of a new partner, the method of valuation of goodwill is decided by:
(a) the new partner only
(b) the old partners only
(c) the old partners and the new partner
(d) the accountant of the firm

Answer

C

Question. Share of goodwill brought by the new partner in cash is shared by old partners in:
(a) ratio of sacrifice
(b) old profit sharing ratio
(c) new profit sharing ratio
(d) none of the above

Answer

A

Question. X and Y are partners sharing profits and losses in the ratio of 3 : 2. Z is admitted for 1/5th share in profits which he gets from X. New profit sharing ratio will be
(a) 12 : 8 : 5
(b) 8 : 12 : 5
(c) 2 : 2 : 1
(d) 2 : 2 : 2

Answer

C

Question. A and B are partners sharing profit and losses in the ratio of 3 : 2. A’s capital is Rs. 1,20,000 and B’s capital is Rs. 60,000. They admit C for 1/5th share of profits. C should bring as his capital
(a) Rs. 36,000
(b) Rs. 48,000
(c) Rs. 58,000
(d) Rs. 45,000

Answer

D

Question. A and B are partners sharing profits and losses in the ratio 5 : 3. On admission, C brings by cheque Rs. 70,000 as Capital and Rs. 48,000 as Goodwill. New Profit-sharing Ratio among A, B and C is 7 : 5 : 4. Sacrificing ratio between A and B is :
(a) 3 : 1
(b) 4 : 7
(c) 5 : 4
(d) 2 : 1

Answer

A

Question. At the time of admission of a new partner, the entry for unrecorded investment will be:
(a) Dr. Investment A/c and Cr. Revaluation A/c
(b) Dr. Partners’ Capital A/c and Cr. Investment A/c
(c) Dr. Revaluation A/c and Cr. Investment A/c
(d) None of the above

Answer

A

Question. A and B are partners sharing profits and losses in the ratio of 5:3. On admission, C brings Rs 70000 as capital and Rs 43000 against goodwill. New profit ratio between A, B and C is 7:5:4. The sacrificing ratio of A and B is:
(a) 3:1
(b) 1:3
(c) 4:5
(d) 5:9

Answer

A

Question. X and Y share profits and losses in the ratio of 4 : 3. The admit Z in the firm for 3/7th share which he gets 2/7th from X and 1/7th from Y. New Profit-sharing Ratio will be :
(a) 7 : 3 : 3
(b) 2 : 2 : 3
(c) 5 : 2 : 3
(d) 2 : 3 : 3

Answer

B

Question. A and B are partners, sharing profits in the ratio of 5 : 3. They admit C for 1/5thshare in profits, which he acquires equally from both A and B. New profit sharing ratio will be:
(a) 21 : 11 : 8
(b) 20 : 10 : 4
(c) 15 : 10 : 5
(d) 10 : 5 : 4

Answer

A

Question. Amit and Sumit are partners in a firm sharing profits and losses equally .A new partner Lalit is admitted for 20 % share and Goodwill of the firm is valued at Rs 60,000 . What is the entry for Goodwill ,if Lalit does not bring his share of goodwill in cash .
(a) Premium for Goodwill A/c …..Dr. 15,000 To Amit’s Capital A/c 7,500 To Sumit’s Capital A/c 7,500
(b) Lalit’s Current A/c …..Dr. 15,000 To Amit ‘s Capital A/c 7,500 To Sumit’s Capital A/c 7,500
(c) Premium for Goodwill A/c …..Dr. 12,,000 To Amit’s Capital Alc 6,000 To Sumit’s Capital A/c 6,000
(d) Lalit’s Current A/c …..Dr. 12,000 To Amit ‘s Capital 6,000 To Sumit‘s Capital 6,000

Answer

D

Question. On the Admission of New partner, Increase in a Liability of the firm will be shown in _
(a) Credit Side of profit & loss appropriation A/c
(b) Debit Side of Profit & Loss Appropriation A/c
(c) Credit side of revaluation A/c
(d) Debit side of Revaluation A/c

Answer

D

Question. In Case of Admission of a partner ,the entry for unrecorded Investment will be :-
(a) Debit Partners Capital A/c & Credit Investment A/c
(b) Debit Revaluation A/c & Credit Investment A/c
(c ) Debit Investment A/c & Credit Revaluation A/c
(d) None of the Above

Answer

C

Question. Match the following

(a) 1-iv , 2-ii , 3-i , 4-iii
(b) 1-ii , 2-iv , 3-i ,4-iii
(c) 1-ii , 2-i , 3-iii , 4-iv
(d)1-ii , 2-iv , 3-iv , 4-iii

Answer

A

Question. In Case of Fixed Capitals,Undistributed Losses are transferred to –
(a) Debit of Partners Capital A/c
(b) Credit of Partners Capital A/c
(c) Debit of Partners Current A/c
(d) Credit of Partners Current A/c

Answer

C

Question. A, B ,C and D are Partners in a firm . A and B Share 2/3rd of profits Equally .C & D Share remaining Profits in the Ratio of 3:2.Find the profit sharing Ratio of A ,B ,C, and D.
(a) 7:7:6:4
(b) 5:5:3:2
(c) 3:3:3:2
(d) 3:3:6:4

Answer

B

Question. Goodwill of the firm is valued at Rs 1,00,000 . Goodwill also appears in the books at Rs 50,000 . C is admitted for ¼ Share . The amount of goodwill to be brought in by c will be :
(a) Rs 20,000
(b) Rs 25,000
(c) Rs 30,000
(d) Rs 40,000

Answer

B

Question. If the new partner brings any additional amount of cash other than his capital contributions then it is termed as :
(a) Capital
(b) Reserves
(c) Profits
(d) Premium for Goodwill

Answer

D

Question. A and B are partners sharing profits in the ratio of 3 : 2. On admission of C for 1/5th share, Land is appreciated by 10% (Book Value Rs. 80,000),Building is decreased by 20% (Rs. 2,00,000), Unrecorded Debtors of Rs. 1,250 are bought in the books and Creditors of Rs. 2,750 need not be paid. The Gain (profit) /loss on revaluation will be:
(a) Loss Rs. 28,000
(b) Loss Rs. 40,000
(c) Profit Rs. 28,000
(d) Profit Rs. 40,000

Answer

A

Question. The Need of revaluation of assets and liabilities on admission
(a) Assets and Liabilities should appears at revised values
(b) Any profit and loss an account of change in values belong to old partners
(c) All unrecorded assets and liabilities get recorded
(d) None of Above

Answer

B

Question. On admission of a partner, which of the following items the Balance Sheet is transferred to the credit of Capital Accounts of old partners in the old Profit-sharing Ratio, if Capital Accounts are maintained following Fluctuating Capital Accounts Method
(a) Deferred Revenue Expenditure;
(b) Profit and Loss Account (Debit Balance);
(c) Profit and Loss Account (Credit Balance);
(d) Balance in Drawings Account of partners.

Answer

C

Question. Amit and Anil are partners sharing profits in the ratio of 5 : 3 having Capitals of Rs. 2,50,000 and Rs. 2,00,000 respectively. Atul was admitted as partner for 1/5th share in profits who brings Rs. 50,000 as Capital and Rs. 16,000 as Goodwill. Capitals are to be in proportion to profit-sharing ratio based on Atul’s share. Capitals of Amit, Anil and Atul respectively after admission of Atul will be:
(a) 1,25,000 : 75,000 : 50,000
(b) 2,20,000 : 1,82,000 : 66,000
(c) 2,92,500 : 2,25,000 : 50,000
(d) 2,82,500 : 2,19,500 : 66,000

Answer

A

Question. X and Y are partners sharing profits in the ratio of 3 : 1. They admit Z as a partner who pays Rs. 4,000 as Goodwill .New Profit-sharing Ratio being 2 : 1 : 1 among X, Y, Z. Goodwill will be credited to:
(a) X and Y as Rs. 3,000 and Rs. 1,000
(b) X only
(c) Y Only
(d) None

Answer

B

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 above

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. A, B and C are partners haring profits in ratio of 3 : 2 : 1. They admit D as partner in the firm. A, B and C give 1/3rd, 1/6th, 1/9thshare of their respective profits. The share of profit of D will be:
(a) 1/10
(b) 13/54
(c) 12/54
(d) 10/55

Answer

B

Question. A and B are partners. C is admitted for 1/5th share. C brings Rs. 1,20,000 as his share in Capital. Net worth of the firm is:
(a) Rs. 1,00,000
(b) Rs. 4,00,000
(c) Rs. 1,20,000
(d) Rs. 6,00,000

Answer

D

Question.A, B and C share profits and Losses in the ratio, of 3 : 2 : 1. D is admitted for 1/6th share which he gets from A. New ratio will be:
(a) 2 : 2 : 1 : 1
(b) 3 : 1 : 1 : 1
(c) 2 : 2 : 2 : 1
(d) 1 : 1 : 2 : 2

Answer

A

Question. A, B and C are partners sharing profits in the ratio of 4 : 3 : 2. D is admitted for 2/9thshare of profits. He brings Rs. 30,000 as capital.New Profit-sharing Ratiois 3 : 2 : 2 : 2. Goodwill amount will be credited in the capital account of :
(a) A only
(b) A, B and C (equally)
(c) A, and B (equally)
(d) A, and C (equally)

Answer

B

Question. A and B share profits in the ratio of 3:2. A’s capital is Rs. 48,000, B’s capital is Rs. 32,000. C is admitted for 1/5th share in profits. C will bring as his Capital
(a) Rs. 20,000
(b) Rs. 16,000
(c) Rs. 1,00,000
(d) Rs. 64,000

Answer

A

Question. X and Y are partners sharing profits in the ratio 5 : 3. They admitted Z for 1/5th share in profits, for which he paid Rs. 1,20,000 as Capital and Rs. 60,000 as Goodwill. Capitals for each partner, taking Z’s capital as base capital will be:
(a) 3,00,000, 1,20,000 and 1,20,000
(b) 3,00,000, 1,20,000 and 1,80,000
(c) 3,00,000, 1,80,000 and 1,20,000
(d) 3,00,000, 1,80,000 and 1,80,000

Answer

C

Question. A and B are partners sharing profits in the ratio of 7 : 3. C is admitted as a new partner. “A” gave 1/7th of his share and “B” gave 1/3rd of his share to C. New Profit-sharing Ratio will be:
(a) 6 : 2 : 2
(b) 4 : 1 : 1
(c) 3 : 2 : 2
(d) None

Answer

A

Question. A and B share profits in the ratio of 3: 4. C is admitted for 1/5th share. New Profit-sharing ratio will be
(a) 3: 4: 1
(b) 12: 16: 7
(c) 16: 12: 7
(d) 12 : 6 : 7

Answer

B

Question. A and B are partners. C is admitted with a guaranteed profit of Rs. 10,000 from A. New Profit-sharing ratio is 3:2:1. Profit for the year 2018 – 19 is Rs. 1,20,000. C will get
(a) Rs. 10,000
(b) Rs. 20,000
(c) Rs. 30,000
(d) None of these

Answer

B

Question. When is Revaluation A/c prepared?
(a) At the time of admission
(b) At the time of retirement
(c) At the time of death
(d) All of the above

Answer

D

Question. Profit or loss on revaluation of assets is transferred to Partners’ Capital account in which ratio?
(a) Equally
(b) Profit sharing ratio
(c) Fixed capital ratio
(d) Current capital ratio

Answer

B

Question. R and S are partners sharing profits in the ratio of 5 : 3. T joins the firm and R gives him 1/4th of his share and S gives 1/5th of his share to him. New Profit-sharing Ratio will be:
(a) 75 : 48 : 37
(b) 45 : 32 : 27
(c) 13 : 7 : 4
(d) 35 : 30 : 25

Answer

A

Question. A, B and C are equal partners, they wanted to change the profit sharing ratio to 4 : 3 : 2. They raised the goodwill to Rs. 90,000. The effected accounts will be:
(a) C’s Capital A/c Dr. 10,000
To A’s Capital A/c 10,000
(b) B’s Capital A/c Dr. 10,000
To A’s Capital A/c 10,000
(c) C’s Capital A/c Dr. 10,000
To B’s Capital A/c 10,000
(d) A’s Capital A/c Dr. 10,000
To C’s Capital A/c 10,000

Answer

D

Question. The proportion in which old partners make a sacrifice:
(a) Ratio of capital
(b) Ratio of sacrifice
(c) Gaining ratio
(d) Profit sharing ratio

Answer

B

Question. A and B share profits and losses in the ratio of 3: 2. Their respective capitals are Rs. 1,20,000 and Rs. 54,000. C is admitted for 1/3rd share in profits who brings Rs. 75,000 as his share of capital. Capitals of A and B to be adjusted according to C’s share. A will withdraw from capital
(a) Rs. 30,000
(b) Rs. 32,000
(c) Rs. 15,000
(d) Rs. 28,000

Answer

A

Question. General reserve at the time of admission of a partner is transferred to:
(a) Revaluation a/c
(b) Partners’ capital a/c
(c) Neither of two
(d) Profit and loss a/c

Answer

B

Question. All accumulated losses are transferred to the capital a/c of the partners in:
(a) New profit sharing ratio
(b) Old profit sharing ratio
(c) Capital ratio
(d) None of the above

Answer

B

Question. If at the of admission, some balance of profit and loss account appears in the books, it will be transferred to :
(a) Profit and loss adjustment account
(b) All partners’ capital account
(c) Old partners’ capital account
(d) Revaluation account

Answer

C

Question. When a new partner brings his share of goodwill in cash, the amount is debited to:
(a) Cash account
(b) Capital accounts of the new partner
(c) Goodwill account
(d) Capital accounts of the old partner

Answer

A

Question. A, B, C, and D are partners. A and B share 2/3rd of profits equally and C and D share remaining profits in the ratio of 3:2. Find the profit sharing ratio of A, B, C and D.
(a) 5:5:3:2
(b) 7:7:6:4
(c) 2.5:2.5:8:6
(d) 3:9:8:3

Answer

A

Question. X and Y are partners in a firm with capital of Rs 180000 and Rs 200000. Z was admitted for 1/3rd share in profits and brings Rs 340000 as capital. Calculate the amount of goodwill
(a) Rs 2,40,000
(b) Rs 1,00,000
(c) Rs 1,50,000
(d) Rs 3,00,000

Answer

D

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 profits in the ratio of 2:3. Their balance sheet shows machinery at Rs 2,00,000; stock Rs 80,000, and debtors at Rs 1,60,000. C is admitted and the new profit sharing ratio is 6:9:5. Machinery is revalued at Rs 1,40,000 and a provision is made for doubtful debts @5%. A’s share in loss on revaluation amount to Rs 20,000. Revalued value of stock will be:
(a) Rs 62,000
(b) Rs 1,00,000
(c) Rs 60,000
(d) Rs 98,000

Answer

C

Question. When new partner does not bring his share of goodwill in cash, the amount is debited to:
(a) Current account of the new partner
(b) Premium account
(c) Capital account of the old partners
(d) Cash account

Answer

C

Question. Ramesh and Suresh are partners sharing profits in the ratio of 2:1 respectively. Ramesh’s capital is Rs 1,02,000 and Suresh capital isRs73,000. they admit Mahesh and agreed to give him 1/5th share in future profit. Mahesh brings Rs 14,000 as his share of goodwill. He agrees to contribute capital in the new profits sharing ratio. How much capital will be brought by Mahesh?
(a) Rs 43,750
(b) Rs 45,000
(c) Rs 47,250
(d) Rs 48,000

Answer

C

Question. A and B are partners in a firm having capital of Rs 54,000 and Rs 36,000 respectively. They admitted C for 1/3rd share in the profits. C brought proportionate amount of capital. The capital brought in by C would be
(a) Rs 90,000
(b) Rs 45,000
(c) Rs 54,000
(d) Rs 36,000

Answer

B

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. 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. Anil and Aman are partners sharing profits and losses in the ratio of 3:2. Akhil is admitted as a new partner for 1/3rd share in the profits. Goodwill of the firm is valued at Rs 60000 and goodwill already appears in the books at Rs 18000. It is decided that the existing goodwill should continue to appear in the books at its old value. Akhil’s share of goodwill is:
(a) Rs 26,000
(b) Rs 14,000
(c) Rs 20,000
(d) Rs 6,000

Answer

B

Question. Ajay and Vijay are partners sharing profits in the ratio of 2:1. Ajay’s son Anil was admitted for ¼ share of which 1/8 was gifted by Ajay to his son. The remaining was contributed by Vijay. Goodwill of the firm is valued at Rs.40,000. How much of the goodwill will be credited to each of old partners’ capital account:
(a) Rs 2500
(b) Rs 5000
(c) Rs 20000
(d) None of the above

Answer

B

Question. New partner may be admitted to partnership:
(a) With the consent of all the old partners
(b) With the consent of any one partner
(c) With the consent of 2/3rd of the old partners
(d) With the consent of 3/4th of the old partners

Answer

A

Question. When a new partner is admitted into the firm the old partner stands to :
(a) Gain in profit sharing ratio
(b) Lose in profit sharing ratio
(c) Not affected at all
(d) Only one partner gain other loose

Answer

B

Question. On the admission of a new partner, increase in the value of assets is debited to :
(a) Profit and loss adjustment account
(b) Assets account
(c) Old partners’ capital account
(d) None of the above

Answer

B

Question. At the time of admission of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital accounts of :
(a) Old partners in old profit sharing ratio
(b) Old partners in new profit sharing ratio
(c) All the partner in the new profit sharing ratio
(d) None of the above

Answer

B

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. A, B, C and D are partners. They change their profit sharing ratio to 2 : 2 : 1 : 1. C’s sacrifice is
(a) 1/6
(b) 1/12
(c) 1/24
(d) 2/6

Answer

B

Question. A and B share profits equally. They admit C for 1/7th share. New Profit-sharing Ratio of A and B is:
(a) 4/7, 1/7
(b) 3/7, 3/7
(c) 2/7, 2/7
(d) 2/7, 4/7

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 above

Answer

A

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. 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. 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 above

Answer

D

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 debited by Rs 36,000

Answer

A

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. 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 dishonoured. 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

Answer

C

Question. The profit sharing ratio of Seema and Ghosh was 5:3. They admitted Munmun as a new partner and the new profit sharing ratio of Seema, Gosh and Munmun was 4:3:3. The sacrificing ratio Seema and Gosh will be:
(a) 5:3
(b) 4:3
(c) 1:1
(d) 3:1

Answer

D

Question. The share of new partner and the sacrificing ratio of old partners is decided by:
(a) the new partner only
(b) the old partners only
(c) the old partners and the new partner
(d) the accountant of the firm

Answer

C

Question. A and B are partners sharing profits in ratio of 3 : 2. A’s Capital is Rs. 30,000 and B’s Capital is Rs. 15,000. They admit C for 1/5th share of profits. C will bring as his capital
(a) Rs. 9,000
(b) Rs. 12,000
(c) Rs. 14,500
(d) Rs. 11,250

Answer

D

Question. X and Y are partners. Z is admitted as partner for 1/7th share. New Profit- sharing Ratio will be
(a) 2 : 3 : 1
(b) 3 : 3 : 1
(c) 6 : 5 : 2
(d) 1 : 1 : 1

Answer

B

Fill in the blanks.

Question. When the value of goodwill of the firm is not given but has to be inferred on the basis of the net worth of the firm ,it is called……………..

Answer

Hidden goodwill

Question. If Super profit of a firm is 10,000,its value of goodwill will be ………….if rate of return is 8%.

Answer

1,25,000

Question. Goodwill is not valued during ………….

Answer

Dissolution of the firm

Question. The value of goodwill is based on ———– judgment of the valuer .

Answer

Subjective

Question. Under ———- method ,goodwill is the excess of capitalized value of business overactual capital employed.

Answer

Capitalisation of average profit

True or false.

Question. “Average profit method” takes into consideration the future maintainable profits.

Answer

True

Question. Self-Generated goodwill is recorded in the books of accounts as some considerationis paid for it.

Answer

False

Question. Location of business does not affect the goodwill of business.

Answer

False

Question. Purchased goodwill may arise on acquisition of an existing business concern.

Answer

True

Question. Goodwill is a fictitious asset

Answer

False

Question. Goodwill can be sold in part.

Answer

False

Question. Goodwill is valued during dissolution of a firm

Answer

False

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