Important MCQs of Admission of Partner chapter Class 12
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Multiple Choice Questions of Admission of Partner chapter of Accounts Class 12
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A New Partner may be admitted into a partnership:
a) with the consent of anyone partner
b) with the consent of a majority of partners
c) With the consent of all old partners
d) With the consent of 2/3rd of old partners
Ans – c
On the admission of a new partner
a) Old firm is dissolved
b) Old partnership is dissolved
c) Both old partnership and firm are dissolved
d) Neither partnership nor firm is dissolved
Ans – b)
whan a new partner is admitted in the firm.
a) old partners gain in profit sharing ratio
b) old partners loose in profit sharing ratio
c) only one partner gains while other losse
d) Not affected at all
Ans – b)
A and B are partners sharing profit in the ratio of 3 : 2. They admit C as a partner by giving him 1/3rd share in future profits. The new ratio will be:
a) 12 : 8 : 5
b) 8 : 12 : 5
c) 5: 5: 12
d) None of the above
Ans – d)
X and Y are partners sharing profit in the ratio of 3:2. Z was admitted with 1/4 share in profits which he acquires equally from X and Y. The new ratio will be:
a) 9: 6: 5
b) 19 : 11 : 10
c) 3 : 3: 2
d) 3: 2: 4
Ans – b)
Sacrificing Ratio is
a) Old Profit sharing Ratio – New profit sharing Ratio
b) New profit sharing Ratio – Old Profit sharing Ratio
c) Equal to Old profit sharing Ratio
d) Equal to New profit sharing Ratio
Ans – a)
A and B share profits in the ratio of 2:1. C is admitted with 1/4 share in profits, C acquires 3/4 of his share from A and 1/4th of his share from B. The new ratio will be:
a) 2 : 1 : 1
b) 23 : 13 : 12
c) 3 : 1 : 1
d) 13 : 23 : 12
Ans – b)
At the time of admission of a new partner in the firm, the new partner compensate the old partners for their loss of share in the super-profits of the firm for which he brings in an additional amount which is known as:-
a) Capital share
b) Premium for goodwill
c) Both a) and b)
d) None of the above
Ans – b)
The account which shows change in the value of assets and liabilities is knows as
a) Profit and Loss Account
b) Profit and Loss Appropriation Account
c) Current Account
d) Revaluation Account
Ans – d)
At the time of admission, incoming partner become liable for the________of the firm and also acquires right on the ___________ .
a) assets, liabilities
b) goodwill, capital
c) liabilities, assets
d) None of these
Ans – c)
At the time of admission of partners, it is presumed that the new partner acquires his share in profits from the old partners in_________ratio in the absence of any additional information.
a) New
b) Gaining
c) OLd
d) None of these
Ans – c)
General Reserve at the time of admission of a partner is transferred to
a) Revaluation Account
b) the credit of old partner’s Capital Accounts
c) the debit of Old partner’s Capital Accounts
d) the credit of Capital Accounts of all the Partners
Ans – b)
At the time of admission of partners, the new profit sharing ratio is concerned with ________ partners while sacrificing ratio is concerned with __________ partners.
a) new, old
b) new, all
c) old, new
d) all, old
Ans – d)
The share of premium of goodwill brought in by the new partner is divided in which ratio?
a) In new Ratio
b) In old Ratio
c) In sacrificing Ratio
d) None of these
Ans – c)
Accumulated Profits/Losses are transferred to the Capital Accounts of old partners in
a) New Profit sharing ratio
b) Old profit sharing ratio
c) Capital Ratio
d) None of these
Ans – b)
A newly admitted partner acquires the right to
a) share in the future profits
b) share in the assets of the firm
c) Both a) and b)
d) None of these
Ans – c)
Reason:- After the admission, a new partner acquires the right to share in the future profits and also in the assets of the firm. He is also liable to share the losses and the liabilities of the firm.
According to section 31(1) of the Indian Partnership Act, 1932, “A person can be admitted as a new partner only with the ___ unless otherwise agreed upon.”
a) consent of one partner
b) consent of the existing partners
c) Both a) and b)
d) consent of the firm
Ans – b)
The asset that normally is valued/revalued at the time of admission of a new partner is
a) Goodwill
b) Fixed Assets
c) Stock
d) Investments
Ans – a)
X and Y are partners in a firm that develops software for industries. X’s minor son Z is a computer wizard. Can he be admitted to the partnership firm?
a) Yes if X agrees
b) Yes, if Y agrees
c) Yes if X and Y agree
d) No, he can not be admitted
Ans – c)
Reason:- Section 30 of the Indian Partnership Act, provides that though a minor cannot be a
partner in a firm, but, with the consent of all the partners, for the time being, he may be
admitted to the benefits of the partnership by an agreement executed through his guardian with the other partners.
When share of new or incoming partner is given without giving the details of sacricie made by old or existing partners, then
a) it is assumed that old partners make sacrifice in their old profit sharing ratio.
b) ther is no change in profit sharing ratio of the old partners
a) only a is correct
b) Only b is correct
c) Both a) and b) are correct
d) Both a) and b) are incorrect
Ans – c)
In the Balance Sheet prepared after the new partnership agreement, Assets and Liabilities are usually shown at
a) Original Value
b) Revalued Value or Amount
c) Realisable Value
d) Current Cost
Ans – b)
A, B, and C are partners sharing profits in the ratio of 3 : 2 : 1. They agree to admit D into the firm. A, B, and C agreed to give 1/3rd, 1/6th, and 1/9th share of their profit. The share of profit of, D will be
a) 1/10
b) 11/64
c) 12/54
d) 13/54
Ans – 13/54
The amount of goodwill brought in by the new partner is credited to _____ partner’s capital account.
a) old
b) sacrificing
c) gaining
d) All of these
Ans – b)
Reason:- The amount of goodwill brought in by the new partner is credited to the capital
accounts of sacrificing partners to compensate them for their sacrifice.
X and Y are partners sharing profits in the ratio of 3 : 1. They admit Z as a partner who pays ₹ 4000 as goodwill, the new profit sharing ratio being 2 : 1 : 1 among X, Y and Z. The amount of goodwill will be credited to
a) X and Y as ₹3000 and ₹1000
b) 2,000 each
c) only Y
d) Only X
Ans – d)
Reson:- Goodwill will be credited in that partner’s capital account who sacrifices. sacrificing Ratio = Old Ratio – New Share
X’s sacrifice = 3/4 – 2/4 = 1/4;
Y’s Sacrifice = 1/4 – 1/4 = Nil
Here, only X sacrifices, So, goodwill will be credited in X’s capital account only.
Contingency reserve appearing in the balance sheet at the time of admission of the partner is __ to old partners capital accounts in old ratio.
a) debited
b) credited
c) Either a) or b)
d) None of these
Ans – b)
Reasons:- Contingency reserve is a free reserve created out of profits related to the period prior to admission. Since it is a part of the profit, therefore it is credited to the old partner’s capital accounts in the old ratio.
Workmen Compensation Reserve (WCR) appears in the Balance Sheet of Rashmi and Suman, Who share profits in the ratio of 2 : 3, at ₹ 80,000. Deepa is admitted and the new profit sharing ratio is 1:1:1. If the claim on account of WCR is estimated at ₹1,00,000, then
a) the difference of ₹ 20,000 will be debited to the revaluation account
b) the difference of ₹ 20,000 will be debited to Rashmi’s Capital account
b) the difference of ₹ 20,000 will be credited to Suman’s Capital account
d) None of the above.
Ans – a)
Reason:- In this case, the difference amount is debited to the revaluation account as it results in an increase in the amount of liability.
Can employee provident funds be distributed among old partners in the old ratio at the time of admission?
a) It can be distributed
b) It can’t be distributed
c) can be distributed if tax is paid
d) None of these
Ans – b)
Reason:- Employee Provident fund is neither a free reserve nor is an accumulated profit.
Therefore, it is not distributed amongst old partners.
If the market value and the book value of investments are ₹ 1,47,000 and 1,50,000. The Investment Fluctuation Fund appears in the Balance Sheet is ₹ 13,500. The ratio of the old partner’s A, B, and C at the time of admission of new partner D is 5:3:2.
a) 5,250, 3,150, 2,100
b) 6,750, 4050, 2,700
c) 5,000, 5,000, 3,500
d) None of these
Ans – a)
X and Y are sharing profits and losses in the ratio of 3:2. They admit Z as a partner and give him a 2/10th share in the profits. The new profit sharing ratio will be
a) 12:8:5
b) 3:2:2
c) 3:2:5
d) 2:1:2
Ans – a)
X and Y are sharing profits and losses in the ratio of 3:2. They admit Z as a partner and give him a 2/10th share in the profits. The new profit sharing ratio will be
a) 12:8:5
b) 3:2:2
c) 3:2:5
d) 2:1:2
Ans – a)
B and N are partners in firm sharing profits in the ratio of 3:2. They admit S as a partner for 1/4th share in the profits. S acquires his share from B and N in the ratio of 2:1. The new profit sharing ratio will be:
a) 2:1:4
b) 19:26:15
c) 3:2:4
d) 26:19:15
Ans – d)
Shiv and Mohan are sharing profits and losses in the ratio of 5:3. They admit Jia as a partner and give her 3/10th share of the profits. He takes this share as 1/5th from Shiv and 1/10th from Mohan. New profit sharing ratio will be
a) 5:6:3
b) 2:4:6
c) 17:11:12
d) 18:24:38
Ans – c)
Shiv and Mohan are sharing profits and losses in the ratio of 5:3. They admit Jea as a partner and give him a 3/10th share of the profits. This share he will get 1/5th from shiv and 1/10th from Mohan. The new profit sharing ratio will be
a) 5:6:3
b) 2:4:6
c) 17:11:12
d) 18:24:38
Ans – c)
A and B are partners sharing profits and losses in the ratio of 7:5. They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/2th from A and 1/8th from B. The new profit sharing ratio will be:
a) 13:7:4
b) 7:13:4
c) 7:5:6
d) 5:7:6
Ans – a)
Gain (profit) or Loss on revaluation of assets and reassessment of liabilities is transferred to Partner’s capital Accounts in their
a) Capital Ratio
b) Equal Ratio
c) Old profit-sharing Ratio
d) Gaining Ratio
Ans – c)
Profit or Loss on revaluation of assets and reassessment of liabilities is transferred to Partner’s Capital Accounts in their
a) Capital Ratio
b) Equal Ratio
c) Old Profit Sharing Ratio
d) Gaining Ratio
Ans – c)
A and B share profits in the ratio of 3:2. They agreed to admit C on the condition that A will sacrifice 3/25th of his share of profit in favour of C and B will sacrifice 1/25th of his profits in favour of C. The new profit sharing ratio will be:
a) 12:9:4
b) 3:2:4
c) 66:48:11
d) 48:66:11
Ans – c)
A firm has an unrecorded investment of ₹10,000. Journal entry to record the unrecorded investment on the admission of a partner will be:
a) Revaluation A/c Dr ₹10,000
To Unrecorded Investment A/c ₹10,000
b) Unrecorded Investment A/c Dr ₹10,000
To Revaluation A/c ₹10,000
C) Partner’s Capital A/c Dr ₹10,000
To Unrecorded Investment A/c ₹10,000
d) None of the above
Ans – b)
Aditya and Shiv were partners in a firm with capitals of ₹3,00,000 and ₹2,00,000, respectively. Naina was admitted as a new partner 1/4th share in the profits of the firm. Naina brought ₹1,20,000 for her share of goodwill premium and ₹2,40,000 for her capital. The amount of goodwill premium credited to Aditya will be
a) ₹40,000
b) ₹30,000
c) ₹72,000
d) ₹60,000
Ans – d)
A and B are partners in firm sharing profits and losses in the ratio of 3:2. A new partner C is admitted. A surrenders 1/15th share of his profit in favour of C and B surrenders 2/15th of his share in favour of C. The new ratio will be:
a) 8:4:3
b) 42:26:7
c) 4:8:3
d) 26:42:7
Ans – b)
When a new partner is admitted, he is entitled to a share of
a) past profits
b) Present Profits
c) Future profits
d) Reserve appearing in the Balance Sheet of the firm
Ans – c)
Unrecorded assets or liabilities are transferred to
a) Partner’s Capital Accounts
b) Revaluation Account
c) Profit and Loss Account
d) partner’s Current Accounts
Ans – b)
A and B are partners sharing profit or loss in the ratio of 4:1. A surrenders 1/4 of his share and B surrenders 1/2 of his share in favour of C, a new partner. What will be the C’s share?
a) 3/4
b) 1/5
c) 1/10
d) 3/10
Ans – d)
Which of the following statement is incorrect in the case of admission of a partner?
a) Increase in the value of the asset will increase capital
b) Increase in the value of assets will decrease capital
c) Increase in the value of liability will decrease capital
d) Decrease in the value of liability will increase capital
Ans – b)
X and Y are partners sharing profits in the ratio of 3:2, and capitals as ₹1,00,000 and ₹50,000 respectively. Z is admitted for 1/5th share in profits. The amount Z will contribute as capital will be
a) ₹50,000
b) ₹35,000
c) ₹37,500
d) ₹60,000
Ans – c)
A and B are partners in a business sharing profits and losses in the ratio of 7:3 respectively. They admit C as a new partner. A sacrificed 1/7th share of his profit and B sacrificed 1/3rd of his share in favour of C. The new profit sharing ratio of A, B and C will be:
a) 3:1:1
b) 2:1:1
c) 2:2:1
d) None of the above
Ans – a)
Premium paid by a new partner in addition to the capital brought in, is meant for
a) Creditors
b) Goodwill
c) Loan
d) Mortgage
Ans – b)
X and Y are partners sharing profits and losses in the ratio of 3:2. Z was admitted for the 1/5th share and for this he brings ₹1,50,000, as capital. If capitals are to be proportionate to profit sharing ratio, the respective capitals of the partners will be
a) ₹3,00,000: ₹3,00,000 :₹1,50,000
b) ₹3,60,000: ₹2,40,000 :₹1,50,000
c) ₹1,50,000: ₹1,50,000 :₹1,50,000
d) ₹1,50,000: ₹2,00,000 :₹4,00,000
Ans – b)
A and B are partners sharing the profit of loss in the ratio of 3:2. C is admitted into partnership as a new partner. A sacrifices 1/3 of his share of B sacrifices 1/4 of his share in favour of C. What will be the C’s share in the firm?
a) 1/5
b) 2/10
c) 3/10
d) None of the above
Ans – c)
Aditya and Shiv were partners in a firm with capitals of ₹3,00,000 and ₹2,00,000, respectively. Naina was admitted as a new partner for 1/4th share in the profits of the firm. Naina brought ₹1,20,000 for her share of goodwill premium and ₹2,40,000 for her capital. The amount of goodwill premium credited by Aditya will be
a) ₹40,000
b) ₹30,000
c) ₹72,000
d) ₹60,000
Ans – d)
Goodwill brought by the incoming partner is distributed among the old partners in their
a) Old profit sharing ratio
b) New profit sharing ratio
c) Sacrificing ratio
d) Gaining ratio
Ans – c)
Niyati and Aisha were partners in a firm sharing profit and losses in the ratio of 4:3. They admitted Bina as a new partner. Niyati sacrificed 1/4th from her share and Aisha sacrificed 1/7th from her share in favour of Bina. Bina’s share in the profits of the firm will be:
a) 2/7
b) 10/49
c) 11/28
d) 7/16
Ans – c)
Unrecorded assets and liabilities are transferred to
a) Partner’s Capital Accounts
b) Revaluation Account
c) Profit and Loss Account
d) Partner’s Current Accounts
Ans – b)
When goodwill existing in the books is written off at the time of admission of a partner, it is transferred to Partner’s Capital Accounts in their
a) Old Profit Sharing ratio
b) New profit sharing ratio
c) sacrificing ratio
d) Gaining Ratio
Ans – a)
A and B are partners in firm sharing profits and losses in the ratio of 2:3. C is admitted for 1/5 share in the profits of the form. If C gets it wholly from A, the new profit sharing ratio after C’s admission will be:
a) 1:3:3
b) 3:1:1
c) 2:2:1
d) 1:3:1
Ans – d)
M and N are partners in a firm sharing profits and losses in the ratio of 5:3. On 1st April 2021, they admit R as a partner. The new profit sharing ratio 0f M, N and R will be 7:5:4. The sacrificing ratio of M and N is
a) 5:3
b) 3:1
c) 3:2
d) 4:5
Ans – b)
A and B are partners sharing profits in the ratio of 2:3, they admit C as a partner for 1/4th share, the sacrificing ratio of A and B will be
a) 2:3
b) 1:1
c) 3:2
d) 2:1
Ans – a)
A and B are partners sharing ratios in the ratio of 4:3. They admitted C as a new partner who gets 1/5th share of profit, entirely from A. The new profit sharing ratio will be:
a) 20:8:7
b) 13:15:15
c) 13:15:7
d) 15:13:5
Ans – c)
When a new partner is admitted, the balance of ‘General Reserve’ appearing in the Balance Sheet at the time of admission is credited to
a) Profit and Loss Appropriation Account
b) Capital Accounts of all the partners
c) Capital Accounts of Old Partners
d) Revaluation Account
Ans – c)
Niyati and Aisha were partners in a firm sharing profits and losses in the ratio of 4:3. They admitted Bina as a new partner. Niyati sacrificed 1/4th from her share and Aisha sacrificed 1/7th from her share in favour of Bina. Bina’s share in the profits of the firm will be:
a) 2/7
b) 11/28
c) 10/49
d) 7/16
Ans – c)
A, B, C, D are in partnership sharing profits and losses in the ratio of 9:6:5:5. E joins the partnership for 20% share, A, B, C and D would in future share profits among themselves as 3/10:4/10:2/10:1/10. The new profit sharing ratio will be:
a) 3:4:2:1:5
b) 9:6:5:5:5
c) 6:8:4:2:5
d) 8:6:4:2:5
Ans – c)
Anita and Babita were partners sharing profits and losses in the ratio of 3:1. Savita was admitted for 1/5th share in the profits. Savita was unable to bring her share of goodwill premium in cash. The Journal entry recorded for goodwill premium is given below:
a) Savita’s Current A/c Dr. 24,000
To Anita’s Capital A/c 8,000
To Babita’s Capital A/c 16,000
The new profit sharing ratio of Anita, Babita and Savita, will be
a) 41:7:12
b) 13:12:10
c) 3:1:1
d) 5:3:2
Ans – a)
Goodwill brought by the incoming partner is distributed among the old partners in their
a) Old profit sharing ratio
b) New profit sharing ratio
c) sacrificing ratio
d) Gaining ratio
Ans – c)
A and B are in partnership sharing profits and losses as 3:2. C is admitted for 1/4th share. Afterwards, D enters for 20 paise in the rupee. The new profit sharing ratio after D’s admission will be:
a) 9:6:5:5
b) 6:9:5:5
c) 3:2:4:5
d) 3:2:5:5
Ans – a)
An increase in the value of liabilities at the time of admission of a partner is
a) Debited to Revaluation Account
b) Credited to Revaluation Account
c) Credited to Partner’s Capital Account
d) Debited to Partner’s Capital Account
Ans – a)
When goodwill existing in the books is written off at the time of admission of a partner, it is transferred to the partner’s capital accounts in their
a) Old profit sharing ratio
b) New profit sharing ratio
c) Sacrificing ratio
d) Gaining ratio
Ans – a)
The formula for calculating the sacrificing ratio is:
a) New share – Old share
b) Old share – New share
c) Gaining Ratio – Old Ratio
d) Old Ratio – Gaining Ratio
Ans – b)
For which of the following situations, old profit sharing ratio of partners is used at the time of admission of a new partner?
a) When new partner brings only a part of his share of goodwill
b) When new partner is not able to bring his share of goodwill
c) When at the time of admission, goodwill already exists in the Balance Sheet
d) When new partner brings his share of goodwill in cash
Ans – c)
A and B are partners sharing profits in the ratio of 2:3, they admit C as a partner for 1/4th share, the sacrificing ratio of A and B will be
a) 2:3
b) 1:1
c) 3:2
d) 2:1
Ans – a)
X and Y are partners sharing profits in the ratio of 3:2. Z is admitted as a partner. Calculate sacrificing ratio if new profit sharing is 9:7:4.
a) 3:1
b) 3:2
c) 1:3
d) 9:7
Ans – a)
A and B are partners in a firm having a capital of ₹54,000 and ₹36,000 respectively. They admitted C for 1/3rd share in the profits. C brought the proportionate amount of capital. The capital brought in by C would be
a) ₹90,000
b) ₹45,000
c) ₹5,400
d) ₹3,600
Ans – b)
When a new partner is admitted, the balance of ‘General Reserve’ appearing in the Balance Sheet at the time of admission is credited to
a) Profit and Loss Appropriation Account
b) Capital Accounts of all the partners
c) Capital Accounts of Old Partners
d) Revalutaion Account
Ans – c)
Bishan and Sudhu were partners in a firm sharing profits and losses in the ratio of 5:3. Alena was admitted as a new partner. It was decided that the new profit sharing ratio of Bishan, Sudha and Alena will be 10:6:5. The sacrificing ratio of Bishan and Sudha will be:
a) 5:3
b) 25:78
c) 6:5
d) 2:1
Ans – a)
P and Q are partners in a firm having capitals of ₹15,000 each. R is admitted for 1/3rd share for which he has to bring ₹20,00 for his share of capital. The amount of goodwill will be
a) ₹8,000
b) ₹10,000
c) ₹9,000
d) ₹11,000
Ans – b)
Anita and Babita were partners sharing profits and losses in the ratio of 3:1. Savita was admitted for 1/5th share in the profits. Savita was unable to bring her share of goodwill premium in cash. The journal entry recorded for premium for goodwill is as below.
Savita’s Current A/c Dr. 24,000
To Anita’s Capital A/c 8,000
To Babita’s Capital A/c 16,000
The new profit sharing ratio of Anita, Babita and Savita, will be
a) 41:7:12
b) 13:12:10
c) 3:1:1
d) 5:3:2
Ans – a)
A and B are partners sharing profits in the ratio of 5:3. A surrenders 1/4th of his share and B surrenders 1/5 of his share in favour of C, a new partner. What is the sacrificing ratio?
a) 4:5
b) 5:4
c) 12:25
d) 25:12
Ans – d)
When the new partner brings cash for goodwill, the amount is credited to
a) Revaluation Account
b) Cash Account
c) Premium for Goodwill Account
d) Realisation Account
Ans – c)
Suna and Star were partners in a firm sharing profits in the ratio of 2:1. Moon was admitted as a new partner in the firm. The new profit sharing ratio was 3:3:2. Moon brought the following assets towards his share of goodwill and his capital:
Machinery – ₹2,00,000
Furniture – ₹1,20,000
Stock – ₹80,000
Cash – ₹50,000
If his capital is considered as ₹3,80,000, the goodwill of the firm will be:
a) ₹70,000
b) ₹2,80,000
c) ₹4,50,000
d) ₹1,40,000
Ans – b)
A and B are partners sharing profits in the ratio of 11:4. C was admitted. A surrendered 1/11th of his share and B 1/4th of his share in favour of C. The sacrificing ratio will be:
a) 11:4
b) 1:1
c) 4:11
d) 7:4
Ans – b)
A new partner can be admitted into the partnership.
a) with the consent of anyone partner
b) with the consent of a majority of partners
c) with the consent of all the partners
d) with the consent of 2/3rd of old partners
Ans – c)
A and B are partners sharing profits and losses in the ratio of 5:3. C is admitted in the firm. He brings ₹70,000 as cash and ₹43,000 for 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
Ans – a)
Mona and Tina were partners in a firm sharing profits in the ratio of 3:2. Naina was admitted with 1/6th share in the profits of the firm. At the time of admission, Workmen’s Compensation Reserve appeared in the Balance Sheet of the firm at ₹32,000. The claim on account of workmen’s Compensation was determined at ₹40,000. Excess of claim over the reserve will be
a) Credited to Revaluation Account
b) Debited to Revaluation Account
c) To record loss on revaluation
d) to record the capital brought in
Ans – c)
P and Q are partners sharing profits in the ratio of 9:7. R is admitted as a partner with 9/20th share in the profits, which he takes 1/5th from P and 1/4th from Q. Sacrificing ratio will be:
a) 5:4
b) 9:7
c) 7:9
d) 4:5
Ans – d)
A and B are in partnership sharing profits in the ratio of 3:2. They take C as a new partner. Goodwill of the firm is valued at ₹3,00,000 and C brings ₹30,000 as his share of goodwill in cash which is entirely credited to the Capital Account of A, New profit sharing ratio will be:
a) 3:2:1
b) 6:3:1
c) 5:4:1
d) 4:5:1
Ans – c)
X and Y are partners sharing profits in the ratio of 2:1. They admit Z into the partnership for 1/4th share in profits for which he brings ₹20,000 as his share of capital. Hence, the adjusted capitals of X and Y will be
a) ₹40,000 and ₹20,000 respectively
b) ₹32,000 and ₹16,000 respectively
c) ₹60,000 and ₹30,000 respectively
d) ₹20,000 and ₹40,000 respectively
Ans – a)
Mita and Sumit are partners in a firm with capitals of ₹6,00,000 and ₹4,00,000 respectively. Keshav was admitted as a new partner for 1/5th share in the profits of the firm. Keshav brought ₹40,000 as his share of goodwill premium and ₹3,00,000 of his capital. The amount of goodwill premium credited to Sumit will be
a) ₹20,000
b) ₹24,000
c) ₹16,000
d) ₹40,000
Ans – a)
A, B and C are partners sharing in the ratio of 5:4:3. They admit D for 1/7th share. It is agreed that B would retain his original share. Sacrificing ratio will be:
a) A, B and C – 5:4:3
b) A and C – 4:4
c) A and C – 5:4
d) A and C – 5:3
Ans – d)
At the time of admission, if the profit sharing ratio among the old partners does not change then sacrificing ratio will be
a) equal
b) according to the contribution of capital
c) their old profit sharing ratio
d) according to a new partner
Ans – c)
X and Y are partners sharing profits in the ratio of 3:1. They admit Z as a partner who pays ₹40,000 as goodwill. The new profit sharing ratio is 2:1:1 among X, Y and Z. The amount of goodwill that will be credited to
a) X and Y as ₹30,000 and ₹10,000
b) X only
c) Y only
d) None of these
Ans – b)
Anil and Balu are partners in a firm. They decided to admit Chirag for 1/4th share in the firm. The goodwill of the firm is valued at ₹30,000. Goodwill also appears in the books at ₹12,000. What amount is Chirag supposed to bring for goodwill?
a) ₹3,000
b) ₹4,500
c) ₹7,500
d) ₹10,500
Ans – c)
A and B are partners sharing profits and losses in the ratio of 5:4. C is admitted for 1/5th share. A and B decide to share equally in future. Sacrificing ratio will be:
a) 5:4
b) 2:7
c) 7:2
d) 1:1
Ans – c)
L and M share profits of a business in the ratio of 5:3. They admit N as a partner in the firm for 1/4th share in the profits. For the purpose of admission of N, Goodwill of the firm is to be valued at 4 years purchase of the Average Super Profit of the last 3 years. The average Profit of the last 3 years is ₹20,000. The normal Profit is ₹12,000.
i) The new profit sharing ratio is
a) 4:3:1
b) 3:3:2
c) 15:9:8
d) 4:2:1
Ans – c)
ii) For adjustment of goodwill, the entry will be:
a) N’s Capital A/c Dr ₹8,000
To L’s Capital A/c ₹8,000
b) N’s Capital A/c Dr ₹8,000
To L’s Capital A/c ₹5,000
To M’s Capital A/c ₹3,000
c) N’s Capital A/c Dr ₹6,000
To L’s Capital A/c ₹3,000
To M’s Capital A/c ₹3,000
d) N’s Capital A/c Dr ₹8,000
To L’s Capital A/c ₹3,000
To M’s Capital A.c ₹5,000
Ans – b)
If at the time of admission, there is some unrecorded asset, it will be:
a) Debited to Revaluation Account
b) Credited to Revaluation Account
c) Debited to Goodwill Account
d) Credited to Partner’s Capital Accounts
Ans – a)
A and B are partners in firm sharing profits in the ratio 3:2. C is admitted as a partner. The new profit sharing ratio of A, B and C is 7:3:2 The sacrificing ratio of A and B is:
a) 3:2
b) 1:9
c) 2:5
d) 8:7
Ans – b)
An increase in the value of liabilities at the time of admission for a partner is
a) Debited to Revaluation Account
b) Credited to Revaluation Account
c) Credited to Partner’s Capital Account
d) Debited to Partner’s Capital Account
Ans – a)
If at the time of admission, there is some unrecorded liability, it will be:
a) Debited to Revaluation Account
b) Credited to REvaluation Account
c) Debited to Goodwill Account
d) Credited to partner’s Capital Accounts
Ans – a)
A and B are partners. They admit C for 1/3rd share. In future, the ratio between A and B would be 2:1. Sacrificing ratio will be:
a) 2:1
b) 1:1
c) 5:1
d) 1:5
Ans – d)
For which of the following situations, old profit sharing ratio of partners is used at the time of admission of a new partner?
a) When a new partner brings only a part of his share of goodwill
b) When a new partner is not able to bring his share of goodwill
c) When, at the time of admission, goodwill already exists in the Balance Sheet
d) When a new partner brings his share of goodwill in cash
Ans – c)
P and Q are partners sharing profits and losses as 2:1. R and S are admitted and the profit-sharing ratio becomes 3:2:4:1. Goodwill is valued at ₹90,000. R and S bring the required goodwill in cash which will be credited to:
a) P ₹30,000; Q ₹15,000
b) P ₹66,000; Q ₹24,000
c) P ₹33,000; Q ₹12,000
d) P ₹27,000; Q ₹18,000
Ans – c)
A, B and C are partners in a firm sharing profits and losses equally. They admitted D for 1/4th share in the firm. The new profit sharing ratio will be:
a) 4:3:2:1
b) 1:1:1:1
c) 2:2:2:1
d) Can not be calculated
Ans – b)
A B and C are equal partners. D is admitted as a partner in the firm for 1/4th share. D brings ₹20,000 as capital and ₹5,000 being half of the premium for goodwill. The value of goodwill of the firm is
a) ₹10,000
b) ₹40,000
c) ₹20,000
d) None of these
Ans – b)
Partners A, B and C share the profits of a business in the ratio of 3:2:1 respectively. They admit D who brings in ₹60,000 for his share of goodwill. A, B, C and D decide to share the profits respectively in the ratio of 5:3:2:2. Credit will be given to:
a) A ₹6,000; B ₹6,000
b) A ₹30,000; B ₹18,000; C ₹12,000
c) A ₹30,000; B ₹20,000; C ₹10,000
d) A ₹30,000; B ₹30,000
Ans – d)
Aditya and Shiv were partners in a firm with capitals of ₹3,00,000 and ₹2,00,000, respectively. Naina was admitted as a new partner for 1/4th share in the profits of the firm. Naina brought ₹1,20,000 for her share of goodwill premium and ₹2,40,000 for her capital. The amount of goodwill premium credited to Aditya will be:
a) ₹40,000
b) ₹30,000
c) ₹72,000
d) ₹60,000
Ans – d)
P and Q are partners in a firm having capitals of ₹15,000 each. R is admitted as a partner for 1/3rd share for which he has to bring ₹20,000 for his share of capital. The amount of goodwill will be
a) ₹8,000
b) ₹10,000
c) ₹9,000
d) ₹11,000
Ans – b)
A and B are partners sharing profits and losses as 2:1. C is admitted and the profit-sharing ratio becomes 4:3:2. Goodwill of the firm is valued at ₹94,500. C brings required goodwill in cash. Goodwill amount will be credited to:
a) A ₹14,000 and B ₹7,000
b) A ₹12,000 and B ₹9,000
c) A ₹21,000
d) A ₹94,500
Ans – c)
The profit-sharing ratio of A, B and C who are partners in the firm is 4:3:2. After D is admitted, the sacrificing ratio will be:
a) 5:3:2
b) 3:2:1
c) 4:3:2
d) 1:1:1
Ans – c)
When the new partner brings cash for goodwill, the amount is credited to
a) Revaluation Account
b) Cash Account
c) Premium for Goodwill Account
d) Realisation Account
Ans – c)
Ram and Shyam share profits and losses in the ratio of 5:3. Brij is admitted for 3/10th share of profits half of which was gifted by Ram and the remaining share was taken by Brij equally from Ram and Shyam. The new ratio among the partners is:
a) 4:3:3
b) 3:4:3
c) 10:4:6
d) 5:2:3
Ans – a)
A and B are partners sharing profits and losses as 2:1. C is admitted and the profit sharing ratio becomes 4:3:2. Goodwill is valued at ₹94,500. C brings required goodwill in cash. Goodwill amount will be credited to:
a) A ₹14,000 and B ₹7,000
b) A ₹12,000 and B ₹9,000
c) A ₹21,000
d) A ₹94,500
Ans – c)
X and Y are partners with capitals of ₹18,000 and ₹12,000 respectively. A new partner Z is admitted with 1/5thshare in profits. He brings ₹14,000 for his capital. Profit and Loss A/c has a credit balance of ₹10,000 on the date of admission of Z. Value of hidden goodwill at the time of Z’s admission will be
a) ₹16,000
b) ₹25,000
c) ₹20,000
d) None of these
Ans – a)
A and B are partners sharing profits in the ratio of 2:1. C is admitted for 1/4th share of profits which he acquired equally from A and B. C brings ₹30,000 as goodwill, it will be credited to old partners as:
a) ₹15,000 each
b) ₹20,000, ₹10,000 respectively
c) ₹10,000, ₹20,000 respectively
d) None of these
Ans – a)
X and Y are partners sharing profits and losses in the ratio of 3:2. They admit Z into partnership with 1/5th share in profits which he acquires equally from X and Y. Z brings in ₹40,000 as goodwill in cash. Goodwill amount will be credited to:
a) X ₹20,000; Y ₹20,000
b) X ₹25,000; Y ₹15,000
c) X ₹24,000; Y ₹16,000
d) X ₹4,000; Y ₹4,000
Ans – a)
X and Y share profits and losses in the ratio of 2:1. They take Z as a partner and the new profit sharing ratio becomes 3:2:1. Z brings ₹9,000 as a premium for goodwill. The full value of goodwill will be
a) ₹60,000
b) ₹36,000
c) ₹54,000
d) ₹27,000
Ans – c)
A and B are sharing profits and losses in the ratio of 4:1. C is admitted as a new partner for 1/3rd share of profits for which he pays ₹3,00,000 as goodwill. If A and B agree to share future profits equally, then the amount of goodwill to be credited to A is:
a) ₹3,00,000
b) ₹9,00,000
c) ₹4,80,000
d) ₹4,20,000
Ans – d)
A and B are partners sharing profits and losses in the ratio of 3:2. C is admitted into a partnership for 1/5th share in profit. He pays ₹1,00,000 as goodwill. The ratio of the partner’s A, B and C in the new firm would be 3:1:1. Goodwill will be credited to:
a) Only A ₹1,00,000
b) Only B ₹1,00,000
c) A ₹60,000; B ₹40,000
d) A ₹75,000; B ₹25,000
Ans – b)
At the time of admission, if the profit sharing ratio among the old partners does not change then sacrificing ratio will be
a) Equal
b) according to the contribution of capital
c) their old profit sharing ratio
d) according to a new partner
Ans – c)
On admission of a new partner, the revaluation profit/loss is transferred to:
a) All partners in new ratio
b) Old partners in sacrificing ratio
c) Old partners in the old ratio
d) None of these
Ans – c)
A and B are partners in a firm sharing profits in the ratio of 2:1. C is admitted as a partner. A and B surrender 1/2 of their respective share in favour of C. C is to bring his share of the premium for goodwill in cash. The goodwill of the firm is estimated at ₹60,000. Credit
will be given to:
a) A ₹15,000; B ₹15,000
b) A ₹40,000; B ₹20,000
c) A ₹30,000; B ₹30,000
d) A ₹20,000; B ₹10,000
Ans – d)
If at the time of admission of a new partner, there is some unrecorded liability, it will be transferred to:
a) Capital accounts of old partners
b) Capital accounts of all partners
c) Goodwill account
d) Revaluation account
Ans – d)
P and S are partners sharing profits in the ratio of 3:2. R is admitted with 1/5th share and he brings in ₹84,000 as his share of goodwill which is credited to the capital accounts of P and S respectively with ₹63,000 and ₹21,000. The new profit sharing ratio will be:
a) 3:1:5
b) 9:7:4
c) 3:2:5
d) 7:9:4
Ans – b)
A revaluation account is prepared to find out the profit or loss on:
a) Sale of fixed assets
b) Revaluation of assets and liabilities
c) Sale of goods
d) Sale of services
Ans – b)
Partners A, B and C share the profits of a business in the ratio of 3:2:1 respectively. They admit D who brings in ₹60,000 for his share of goodwill. A, B, C and D decide to share the profits respectively in the ratio of 5:3:2:2. Credit will be given to:
a) A ₹6,000; B ₹6,000
b) A ₹30,000; B ₹18,000; C ₹12,000
c) A ₹30,000; B ₹20,000; C ₹10,000
d) A ₹30,000; B ₹30,000
Ans – d)
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
Ans – a)
Anita and Banita were partners sharing profits and losses in the ratio of 3:1. Savita was admitted for 1/5th share in the profits. Savita was unable to bring her share of goodwill premium in cash. The Journal entry recorded for goodwill premium is given below:
Savita’s Current A/c Dr. 24,000
To Anita’s Capital A/c 8,000
To Banita’s Capital A/c 16,000
(Adjustment of goodwill premium on Savita’s Admission)
The new profit sharing ratio of Anita, Babita and Savita, will be
a) 41:7:12
b) 13:12:10
c) 3:1:1
d) 5:3:2
Ans – a)
X and Y are partners sharing profits and losses in the ratio of 5:3. On admission, Z brings ₹70,000 as cash and ₹40,00 against goodwill. New profit ratio between X, Y and Z is &:5:4. The Sacrificing ratio of X and Y is:
a) 3:1
b) 1:3
c) 4:5
d) 5:9
Ans – a)
A and B are partners sharing profits and losses as 2:1. C and D are admitted and the profit-sharing ratio becomes 3:2:4:1. Goodwill is valued at ₹90,000. C and D bring the required goodwill in cash. Credit will be given to:
a) A ₹30,000; B ₹15,000
b) A ₹66,000; B ₹24,000
c) A ₹33,000; B ₹12,000
d) A ₹27,000; B ₹18,000
Ans – c)
X, Y and Z are partners sharing profit in the ratio of 3:2:1. They agree to admit M into the firm. X, Y and Z agreed to give 1/3rd, 1/6th, 1/9th share of their profit. The share of profit of M will be:
a) 11/54
b) 12/54
c) 13/54
d) 14/54
Ans – c)
_______ goodwill is the excess of the desired total capital of the firm over the actual combined capital of all partners.
a) premium
b) Share
c) Hidden
d) Old
Ans – c)
A and B are partners sharing profits and losses in 3:2. They admit C into a partnership for 3/10th share in the profits. A surrenders 1/3rd of his share and B surrenders 1/4th of his share in favour of C. Goodwill of the firm is valued at ₹30,000 but C is unable to bring his share of goodwill in cash. Credit will be given to:
a) A ₹54,000; B ₹36,000
b) A ₹60,000; B ₹30,000
c) A ₹2,00,000; B ₹1,00,000
d) A ₹1,80,000; B ₹1,20,000
Ans – b)
A and B are two partners sharing profits in the ratio of 2:1. C, a new partner admitted for 1/4th share. At the time of admission, loss from revaluation is ₹9,000. Pass a necessary journal entry for distribution of loss between the partners?
a) A’s Capital A/c Dr 6,000
B’s Capital A/c Dr 3,000
To Revaluation A/c 9,000
b) A’s Capital A/c Dr 9,000
To B’s capital A/c 9,000
c) Revaluation A/c Dr 9,000
To A’s Capital A/c 6,000
To B’s Capital A/c 3,000
d) B’s Capital A/c 9,000
To A’s Capital A/c 9,000
Ans – a)
When a new partner doesn’t bring his share of goodwill in cash, the amount is debited to:
a) Cash A/c
b) Current A/c of a new partner
c) Capital A/cs of an old partner
d) Premium for Goodwill A/c
Ans – b)
A and B are partners sharing profits in the ratio of 7:5. C is admitted into the partnership for 1/6th share which he acquires 1/24th from A and 1/8th from B. C does not pay anything for his share of goodwill. On C’s admission, frim’s goodwill was valued at ₹1,80,000. Credit
will be given to:
a) A ₹22,500; B ₹ 7,500
b) A ₹7,500; B ₹22,500
c) A ₹45,000; B ₹1,35,000
d) A ₹1,35,000; B ₹45,000
Ans – b)
A and B are partners in a firm with a capital of ₹1,80,000 and ₹2,00,000. C was admitted for 1/3rd share in profit and brings ₹3,40,000 as capital. Calculate the amount of goodwill.
a) ₹2,40,000
b) ₹1,00,000
c) ₹1,50,000
d) ₹3,00,000
Ans – d)
X and Y are partners in a firm sharing profits in the ratio of 5:3. They admitted Z as a new partner. The new profit sharing ratio will be 4:3:2. The firm’s goodwill on Z’s admission was valued at ₹1,26,000. But Z could not bring any amount of goodwill in cash. Credit
will be given to:
a) X ₹17,500; Y ₹10,500
b) X ₹16,000; Y ₹12,000
c) X ₹22,750; Y ₹5,250
d) X ₹1,02,375; Y ₹23,625
Ans – c)
If, at the time of admission, some profit and loss account balance appears in the books, it will be transferred to:
a) Profit and Loss-Adjustment A/c
b) Revaluation A/c
c) Old partner’s capital account
d) All partner’s capital accounts
Ans – c)
A and B are partners sharing profits in the ratio of 3:2. They admit C into the partnership with 1/4th share in future profits. The new profit sharing ratio is 5:4:3. The firm’s goodwill on C’s admission was valued at ₹1,44,000. But C could not bring any amount for goodwill in cash. Credit will be given to:
a) A ₹80,000; B ₹64,000
b) A ₹20,000; B ₹16,000
c) A ₹1,05,600; B ₹38,400
d) A ₹26,400; B ₹9,600
Ans – d)
If at the time of admission, the revaluation A/c shows a loss, it should be:
a) Credited to old partners capital A/c in the old ratio
b) Credited to old partners capital A/c in sacrificing ratio
c) Debited to old partners capital A/c in the old ratio
d) Debited to old partners capital A/c in sacrificing ratio
Ans – c)
P, Q and R share profits in the ratio of 5:3:2. S is entitled for 1/5th share in profits which he acquires equally from P, Q and R. Goodwill of the firm is to be valued at three year’s purchase of last four years profits which are ₹50,000; ₹60,000; (-) ₹30,000 and ₹40,000. S can not bring his share of goodwill in cash. Credit will be given to:
a) P ₹30,000; Q ₹30,000; R ₹30,000
b) P ₹6,000; Q ₹6,000; R ₹6,000
c) P ₹45,000; Q ₹27,000; R ₹18,000
d) P ₹9,000; Q ₹ 9,000; R ₹9,000
Ans – b)
Revaluation A/c is a:
a) Real account
b) Asset account
c) Personal account
d) Nominal account
Ans – d)
When a new partner brings his share of goodwill in cash, the amount is debited to:
a) Goodwill A/c
b) Capital A/c of the new partner
c) Cash A/c
d) Capital A/cs of the old partners
Ans – c)
L and M are partners sharing profits in the ratio of 3:2 respectively. N was admitted for 1/5th share of profit. Machinery (Book value ₹80,000) would be appreciated by 10% and Building (Book value ₹2,00,000) would be depreciated by 20%. Unrecorded debtors of ₹1,250 would be brought into books new and a creditor amounting to ₹2,750 died and need not pay anything on this account. What will be profit/loss on revaluation?
a) Loss ₹28,000
b) Profit ₹28,000
c) Loss ₹40,000
d) Profit ₹40,000
Ans – a)
When a new partner does not bring his share of goodwill in cash, the amount is debited to:
a) Cash A/c
b) Premium A/c
c) Current A/c of the new partner
d) Capital A/cs of the old partners
Ans – c)
A and B are partners sharing profits in the ratio of 2:1. C is admitted for 1/4th share of profits which he acquired equally from A and B. C brings ₹30,000 as goodwill, it will be credited to old partners as:
a) ₹ 15,000 each
b) ₹ 20,000, ₹ 10,000 respectively
c) ₹ 10,000, ₹ 20,000 respectively
d) None of these
Ans – a)
If at the time of admission, some profit and loss amount balance appears in the books, it will be transferred to:
a) Profit and Loss Adjustment Account
b) All partner’s Capital Accounts
c) Old Partner’s Capital Accounts
d) Revaluation Account
Ans – c)
A and B are sharing profits and losses in the ratio of 4:1. C is admitted as a new partner for 1/3rd share of profits for which he pays ₹3,00,000 as goodwill. If A and B agree to share future profits equally. then the amount of goodwill to be credited to A is:
a) ₹3,00,000
b) ₹9,00,000
c) ₹4,80,000
d) ₹4,20,000
Ans – d)
If at the time of admission, there is some unrecorded liability, it will be:
a) Debited to Revaluation Account
b) Credited to Revaluation Account
c) Debited to Goodwill Account
d) Credited to partner’s capital A/c
Ans – a)
A and B are partners sharing profits and losses in the ratio of 3:2. C is admitted into a partnership for 1/5th share in profit. He pays ₹1,00,000 as goodwill. The ratio of the partner’s A, B and C in the new firm would be 3:1:1. Goodwill will be credited to:
a) only A ₹1,00,000
b) only B ₹1,00,000
c) A ₹60,000; B ₹40,000
d) A ₹75,000; B ₹25,000
Ans – b)
If the new partner brings his share of goodwill in cash, it will be shared by old partners in:
a) Ratio of sacrifice
b) Old profit sharing ratio
c) New profit sharing ratio
d) In capital ratio
Ans – a)
P and Q share profits and losses equally. They have ₹20,000 each as capital. They admit S as an equal partner and goodwill was valued at ₹30,000. S is to bring in ₹30,000 as his capital and necessary cash towards his share of goodwill. Goodwill Account will not remain open in books. If the profit on revaluation is ₹13,000, the closing balance of the capital account of P, Q and R are
a) ₹31,500; ₹31,500; ₹30,000
b) ₹31,500; ₹31,500; ₹20,000
c) ₹26,500; ₹26,500; ₹30,000
d) ₹20,000; ₹20,000: ₹30,000
Ans – a)
A and B share profits and losses equally. They have ₹20,000 each as capital. They admit C as an equal partner and goodwill was valued at ₹30,000. C is to bring in ₹30,000 as his capital and necessary cash towards his share of goodwill. Goodwill Account will not remain open in books. If the profit on revaluation is ₹13,000. Find the closing balance of the capital accounts.
a) ₹31,500, ₹31,500, ₹30,000
b) ₹31,500, ₹31,500, ₹20,00
c) ₹26,500, ₹26,500, ₹30,000
d) ₹20,000, ₹20,000, ₹30,000
Ans – a)
At the time of admission of a new partner, General Reserve is appearing in the old Balances Sheet is transferred to:
a) All Partner’s Capital Accounts in new ratio
b) Old Partner’s Capital Accounts in sacrificing ratio
c) Old Partner’s Capital Accounts in the old ratio
d) None of these
Ans – c)
In the absence of an express agreement as to who will contribute to the new partner’s share of profit, it is implied that the old partners will contribute:
a) Equally
b) In the ratio of their capitals
c) In their old profit sharing ratio
d) In the gaining ratio
Ans – c)
A and B are partners sharing profits in the ratio of 2:3. Their balance sheet shows machinery at ₹4,00,000; stock at ₹1,60,000 and Debtors at ₹3,20,000. C is admitted and a new profit sharing ratio is agreed at 6:9:5. Machinery is revalued at ₹3,40,000 and a provision is made for doubtful debts @2.5%. A’s share in loss on revaluation amounts to ₹20,000. Revalued value of the stock will be:
a) ₹98,000
b) ₹1,00,000
c) ₹1,78,000
d) ₹62,000
Ans – c)
When a new partner brings goodwill in cash, it is credited to:
a) his capital A/c
b) Sacrificing Partner’s Capital A/c
c) Old Partner’s Capital A/cs
d) All Partner’s Capital A/cs
Ans – b)
For which of the following situations, the old profit sharing ratio of partners is used at the time of admission of a new partner?
a) When a new partner brings only a part of his share of goodwill.
b) When a new partner is not able to bring his share of goodwill
c) When at the time of admission, goodwill already appears in the balance sheet.
d) When a new partner brings his share of goodwill in cash
Ans – c)
If the incoming partner brings the amount of goodwill in cash and also a balance exists in the goodwill account, then this goodwill account is written off among the old partners in
a) The new profit sharing ratio
b) The old profit sharing ratio
c) The sacrificing ratio
d) The gaining ratio
Ans – b)
X and Y are the partners in firm sharing profits and losses in the ratio of 5:3. Z is admitted who acquires 1/3rd of Y’s share. The new ratio among partners will be:
a) 5:4:1
b) 4:5:1
c) 1:4:5
d) 5:2:1
Ans – d)
If at the time of admission, the revaluation A/c shows a profit, it should be credited to:
a) Old partners capital accounts in the old profit sharing ratio.
b) All partners capital accounts in the new profit sharing ratio
c) Old partners capital accounts in the new profit sharing ratio
d) Old partners capital accounts in the sacrificing ratio.
Ans – a)
Revaluation Account or Profit and Loss Adjustment A/c is a
a) Real Account
b) Persona Account
c) Nominal Account
d) Asset Account
Ans – c)
A and B are partners in the firm. C is admitted for 1/4th share of profit. He brought ₹2,00,000 as capital and ₹40,000 for goodwill. The total value of goodwill of the firm is:
a) ₹50,000
b) ₹80,000
c) ₹2,40,000
d) ₹1,60,000
Ans – d)
In case of admission of a partner, the entry for unrecorded investments will be:
a) Debit Partners Capital A/cs and Credit Investment A/c
b) Debit Revaluation A/c and Credit Investment A/c
c) Debit Investment A/c and Credit Revaluation A/c
d) None of the above
Ans – c)
X and Y are partners sharing profits in the ratio 3:2. C is admitted. X surrenders 1/6 from his share and Y surrendered 1/4th of his share. C’s share of profit will be:
a) 5/9
b) 2/13
c) 7/12
d) 4/15
Ans – d)
When the balance sheet is prepared after the new partnership agreement, the assets and liabilities are recorded at :
a) Historical Cost
b) Current Cost
c) Realisable value
d) Revalued figures
Ans – d)
Any change in the relationship of existing partners results in an end of the existing agreement and formation of a new one is:
a) Revaluation of partnership
b) Reconstitution of partnership
c) Realisation of partnership
d) None of these
Ans – b)
Goodwill of a firm of A and B is valued at ₹30,000. It is appearing in the books at ₹12,000. C is admitted for 1/4share. What amount he is supposed to bring for goodwill?
a) ₹3,000
b) ₹4,500
c) ₹7,500
d) ₹10,500
Ans – c)
The balance of Investment Fluctuation Fund after meeting the fall in the book value of the investment at the time of admission of a partner is transferred to:
a) Capital A/cs of old partners
b) Capital A/cs of all partners
c) Revaluation A/c
d) General Reserve
Ans – a)
A and B are partners in a firm. They admit C as a partner with 1/5th share in the profits of the firm. C brings ₹4,00,00 as his hare of capital. Calculate the value of C’s share of goodwill on the basis of his capital, given that the combined capital of A and B after all adjustments is ₹10,00,000.
a) ₹1,20,000
b) ₹6,00,000
c) ₹14,00,000
d) ₹20,00,000
Ans – c)
A and B are partners of a partnership firm sharing profits in the ratio of 3:2 respectively. C was admitted for 1/5th share of profit. Machinery would be appreciated by 10% (book value ₹80,000) and the building would be depreciated by 20% (₹2,00,000). Unrecorded debtors of ₹1,250 would be brought into books now and a creditor amounting to ₹2,750 died and need not pay anything on this account. What will be profit/loss on revaluation?
a) Loss ₹28,000
b) Loss ₹40,000
c) Profits ₹28,000
d) Profits ₹40,000
Ans – a)
A and B are in partnership sharing profits and losses in the ratio of 3:2. They admit C into partnership with 1/5th share which he acquires equally from A and B. Accountant has calculated a new profit sharing ratio as 5:3:2. Is accountant correct?
a) True
b) False
c) Partially True
d) Can’t say
Ans – a)
A and B are partners sharing profits in the ratio of 3:2. They admit C into the firm for 1/4th share of profits. C take 1/5th of his share from A and the rest from B. The new profit sharing ratio is:
a) 11:5:4
b) 11:4:5
c) 11:6:5
d) 13:3:4
Ans – b)
Swati and Aman were partners in a firm. Their fixed capitals were ₹9,00,000 and ₹3,00,000, respectively. They shared profits in the ratio of their capitals. Divya was admitted as a new partner for 1/4th share in the profits of the firm.
Divya brought ₹60,000 as her share of goodwill premium and ₹6,00,000 as her capital. The amount of goodwill premium credited to Swati’s account will be
a) ₹60,000
b) ₹30,000
c) ₹45,000
d) ₹15,000
Ans – c)
X and Y are partners sharing profits in the ratio 5:3. They admitted Z for 1/5th profits, for which he paid ₹60,000 against capital and ₹30,000 against goodwill. Find the capital balance for each partner taking Z’s capital as base capital.
a) ₹1,50,000; ₹60,000 and ₹60,000
b) ₹1,50,000; ₹60,000 and ₹90,000
c) ₹1,50,000; ₹90,000 and ₹60,000
d) ₹1,50,000; ₹90,000 and ₹90,000
Ans – c)
Goodwill of the firm of X and Y is valued at ₹45,000. It is appearing in the books at ₹18,000. Z is admitted in the firm. What amount is she supposed to bring on account of goodwill?
a) ₹15,00
b) ₹6,000
c) ₹9,000
d) Can’t be determined
Ans – a)
A, B, C and D are four partners sharing profits in the ratio of 4:3:2:1. They decide to admit their manager E as a partner for 1/4th share which he acquires from A and B in the ratio of 7:3. The sacrificing ratio of A and B will be:
a) 3:7
b) 7:3
c) 1:1
d) None of these
Ans – b)
When premium for goodwill is paid privately by a new partner (at the time of admission), the new partner’s account is credited.
a) True
b) Partially true
c) False
d) Can’t say
Ans – c)
Remesh and Suresh are partners sharing profits in the ratio of 2:1 respectively. Ramesh Capital is ₹1,02,000 and Suresh Capital is ₹73,000. They admit Mahesh and agree to give him 1/5th share in future profit. Mahesh brings ₹14,000 as his share of goodwill. He agrees to contribute
capital in the new profit sharing ratio. How much capital will be brought by Mahesh?
a) ₹43,750
b) ₹45,000
c) ₹47,250
d) ₹48,000
Ans – c)
A and B are partners in a firm sharing profits/losses in a ratio of 1:3. C was admitted for 1/4th share of profit. Machinery would be depreciated by 20% (book value ₹1,00,000) and the building would be appreciated by 10% (book value ₹80,000) unrecorded debtors of ₹2,000 would be brought in books. What was B’s and C’s share of revaluation?
a) ₹2,500, ₹7,500
b) ₹7,500, ₹2,500
c) ₹7,500, ₹0
d) ₹2,500, ₹0
Ans – c)
A and R are partners with respective capital of ₹1,50,000 and ₹1,30,000. C comes as a new partner for 1/5th share and contribute ₹1,20,000 as his capital and necessary amount for his share of goodwill in cash. The goodwill brought by C will be:
a) ₹40,000
b) ₹50,000
c) ₹1,00,000
d) ₹80,000
Ans – a)
Contingency reserve, profit and loss account (credit) balance and deferred revenue expenditure account are credited to capital accounts of an old partner in the old ratio at the time of admission of new partners.
a) True
b) False
c) Partially true
d) Can’t say
Ans – c)
Disha and Abha were partners in a firm. Farad was admitted as a new partner for 1/5th share in the profits of the firm. Farad brought proportionate capital. The capitals of Disha and Abha after all adjustments were ₹64,000 and ₹46,000 respectively. Capital brought by Farad
was:
a) ₹22,000
b) ₹27,500
c) ₹55,000
d) ₹28,000
Ans – b)
Aditya and Shiv were partners in a firm with capitals of ₹3,00,000 and ₹2,00,000, respectively. Naina was admitted as a new partner for 1/4th share in the profits of the firm. Naina brought ₹1,20,000 for her share of goodwill premium and ₹2,40,000 for her capital. The amount of goodwill premium credited to Aditya will be
a) ₹40,000
b) ₹30,000
c) ₹72,000
d) ₹60,000
Ans – d)
Onkar, Nitisha and Sheetal were partners sharing profits in the ratio of 3:1:1. They decided to admit Raman as a partner. On revaluation of assets, it was found that Machinery is overvalued by 25% (the Book value of Machinery was ₹6,25,000). This implies:
a) Revaluation Profit of ₹1,25,00
b) Revaluation Loss of ₹1,25,000
c) Revaluation Loss of ₹1,56,250
d) Revaluation Profit of ₹1,56,250
Ans – b)
When the existing goodwill in books is written off at the time of admission of a new partner, the new partner’s capital accounts is not debited.
a) True
b) Partially false
c) False
d) Can’t say
Ans – a)
A and B are in partnership sharing profits in the ratio of 3:2. They take C as a new partner. Goodwill of the firm is valued at ₹3,00,000 and C brings ₹30,000 as his share of goodwill in cash which is entirely credited to the Capital Account of A. New profit sharing ratio will
be:
a) 3:2:1
b) 6:3:1
c) 5:4:1
d) 4:5:1
Ans – c)
A and B are partners sharing profits and losses equally. At the time of admission of C, revaluation of assets and liabilities was done. Investments were raised by ₹20,000 and there was a provision created on debtors @5% (debtors being ₹1,00,000), the stock was also revalued, loss on realisation for A was ₹5,000. New profit sharing ratio of A:B:C would be 1:1:2. Find the revalued amount of stock, if initially, the stock was ₹60,000.
a) ₹35,000
b) ₹85,000
c) ₹55,000
d) ₹65,000
Ans – a)
A and B are partners sharing profits in the ratio 3:2. C is admitted as a new partner. A sacrificed 1/6th of his share and B sacrificed 1/8th from his share. The sacrificing ratio of A and B is:
a) 3:2
b) 3:4
c) 4:5
d) 2:5
Ans – c)
Maan and Shaan are partners in firm sharing profits equally. Their capitals were ₹90,000 and ₹1,00,000 respectively. Aan was admitted for 1/3rd share in profits/losses and brought ₹1,70,000 as capital. Calculate the amount of goodwill
a) ₹5,10,000
b) ₹3,20,000
c) ₹1,50,000
d) can’t be determined
Ans – c)
X and Y are partners sharing profits in the ratio of 4:3. Z is admitted for 1/5th share and he brings in ₹1,40,000 as his share of goodwill in cash of which ₹1,20,000 is credited to X and the remaining amount to Y. New profit sharing ratio will be:
a) 4:3:5
b) 2:2:1
c) 1:2:2
d) 2:1:2
Ans – b)
Zafar and Zubin are partners with a profit-sharing ratio as 2:3. They admitted Zannat who brought ₹80,000 as goodwill which was credited to Zafar’s and Zubin’s Capital account as ₹60,000 and ₹20,000 respectively goodwill of the firm is ₹4,00,000 calculate new profit sharing ratio.
a) 2:3:5
b) 5:11:4
c) 5:12:3
d) Can’t be determined
Ans – b)
On admission of a partner, an increase in provision for doubtful debts will be _________.
a) Credited to Revaluation A/c
b) Debited to Revaluation A/c
c) Debited to Capital A/c
d) Credited to cash A/c
Ans – b)
According to AS – 10, the value of goodwill should be adjusted through the capital accounts of the partners.
a) True
b) False
c) Partially true
d) Can’t say
Ans – c)
A and B are partners sharing profits in the ratio of 2:3. Their Balance Sheet shows Machinery at ₹2,00,000; Stock at ₹80,000 and Debtors at ₹1,60,000. C is admitted and a new profit sharing ratio is agreed at 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 amounts to ₹20,000. Revalued value of the stock will be:
a) ₹62,000
b) ₹1,00,000
c) ₹60,000
d) ₹98,000
Ans – d)
P and Q are partners sharing profit or loss in a ratio of 2:1. A surrenders 1/4th of his share and B surrenders 1/3rd of his share in favour of R a new partner. What will be R share?
a) 7/12
b) 5/12
c) 13/36
d) 5/18
Ans – d)
X and Y are partners sharing profits and losses in the ratio 3:2. Z is admitted for 1/6th share which he gets from X and Y in the ratio 3:2. The new profit sharing ratio of X, Y and Z will be:
a) 1:1:1
b) 3:2:1
c) 12:8:4
d) None of these
Ans – b)
On the admission of a new partner, the old partnership continues.
a) True
b) Partially true
c) False
d) Can’t say
Ans – c)
A B and C are partners sharing profits in a ratio of 3:2:1. They agree to admit D into the firm. A, B and C agreed to give 1/3rd, 1/6th, 1/9th share of their profit. The share of profit of D will be:
a) 1/10
b) 11/54
c) 12/54
d) 13/54
Ans – d)
A and B are partners in a firm having a capital of ₹54,000 and ₹36,000 respectively. They admitted C for 1/3rd share in the profits. C brought the proportionate amount of capital. The capital brought in by C would be
a) ₹90,000
b) ₹45,00
c) ₹5,400
d) ₹36,600
Ans – b)
X and Y are partners sharing profits and losses in the ratio 3:2. Z is admitted for 1/6th share which he gets from X and Y in the ratio 3:2. The new profit sharing ratio of X, Y and Z will be:
a) 1:1:1
b) 3:2:1
c) 12:8:4
d) None of these
Ans – b)
Shishu and Pranav are partners in a firm and share profits and losses in the ratio of 3:2. Extract of their balance sheet on 31st March 2020 is as follows
Liabilities – Provision for Doubtful Debts ₹4,000
Assets – Debtors ₹10,000
At the time of admission of Shiv as a partner, if provision for doubtful debts is to be maintained at 10% of receivables as on 31st March 2020, when what amount of provision for doubtful debts will be shown in the reconstituted balance sheet?
a) ₹1,000
b) ₹3,000
c) ₹400
d) ₹6,000
Ans – a)
When income partner acquires his share from existing partners in their profit sharing ratio, the steps for calculation of new profit sharing ratio are given as
a) Calculate old partner’s new share as part of the combined share
b) Convert the new shares of all partners and find out the new profit sharing ratio
c) Calculate the combined share of old partners in the new firm by deducting new partners share from (i)
Arrange the steps in the correct order
a) i), iii), ii)
b) iii), i), ii)
c) ii), iii),i)
d) iii), ii), i)
Ans – b)
X and Y are partners sharing profits in the ratio 2:3. They admitted Z for 1/5th share of profits, for which he paid ₹1,20,000 against capital and ₹60,000 as goodwill. Find the capital balances for each partner taking Z’s capital as base capital.
a) ₹3,00,000, ₹1,20,000, ₹1,20,000
b) ₹3,00,000, ₹1,20,000, ₹1,80,000
c) ₹1,92,000, ₹2,88,000, ₹1,20,000
d) ₹3,00,000, ₹1,80,000, ₹1,80,000
Ans – c)
Taxation funds should never be distributed among the old partners at the time of admission of partners.
a) True
b) False
c) Partially true
d) Can’t say
Ans – a)
A and B are partners sharing profits and losses in the ratio of 2:1. C is admitted and the profit-sharing ratio becomes 4:3:2. Goodwill is valued at ₹94,500. C brings required goodwill in cash. Calculate the amount of goodwill to be credited to A and B is:
a) ₹14,000 and ₹7,000 respectively
b) ₹1,05,000 each
c) ₹21,000 to A
d) ₹21,000 to B
Ans – c)
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
Ans – a)
A, B, C, D are in partnership sharing profit and losses in the ratio of 1:2:3:4. E joins for 25% share. The new profit sharing ratio among A, B, C, D will be 4:3:2:1 what is the new profit sharing ratio among A, B, C, D, E?
a) 4:3:2:1:4
b) 8:6:4:2:8
c) 12:9:6:3:10
d) Can’t be determined
Ans – c)
A new partner may be admitted into a partnership:
a) with the consent of anyone partner
b) with the consent of a majority of partners
c) with the consent of all old partners
d) with the consent of 2/3rd of old partners
Ans – c)
Sacrificing ratio is used to distribute _______ in case of admission of a partner:
a) Reserves
b) Goodwill
c) Revaluation Profit
d) Balance in Profit and Loss Account
Ans – b)
On the admission of a new partner:
a) Old form is dissolved
b) old partnership is dissolved
c) both old partnership and firm are dissolved
d) neither partnership nor firm is dissolved
Ans – b)
The new partner, at the time of admission, may acquire his share from old partners in
a) Old profit sharing ratio
b) Some agreed ratio
c) particular fraction from some of the partners
d) All of these
Ans – d)
X and Y are partners in a firm with the capital of ₹1,80,000 and ₹2,00,000. Z was admitted for 1/3rd share in profits and brings ₹3,40,000 as capital, calculate the amount of goodwill:
a) ₹2,40,000
b) ₹1,00,000
c) ₹1,50,000
d) ₹3,00,000
Ans – d)
When a new partner brings his share of goodwill in cash, the amount is to be debited to:
a) Premium A/c
b) Cash A/c
c) Capital A/cs of old partners
d) Capital A/cs of new partners
Ans – b)
Which of the following is not a right of a newly admitted partner?
a) Right to share profits of the firm
b) Right to inspect the books of accounts
c) Right to participate in affairs of business
d) None of these
Ans – d)
A and B are partners sharing profits and losses in the ratio of 5:3. On admission, C brings ₹70,000 as cash and ₹43,000 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
Ans – a)
The ratio in which a partner receives a rise in his share of profits is known as:
a) New ratio
b) Sacrificing ratio
c) Capital ratio
d) Gaining ratio
Ans – d)
Ram and Shyam are partners sharing profits in the ratio of 3:2. They admit Tarun as a new partner. After his admission, the profit-sharing ratio becomes 5:5:3. On the date of Tarun’s Admission, the goodwill of the firm is valued at ₹13,00,000. The amount of goodwill brought in by Tarun will be
a) ₹5,00,000
b) ₹10,00,000
c) ₹3,00,000
d) ₹13,00,000
Ans – c)
A and B are partners in a firm having capitals of ₹54,000 and ₹36,000 respectively. They admitted C for 1/3rd share in the profits. C brought the proportionate amount of capital. The Capital brought in by C would be:
a) ₹90,000
b) ₹54,000
c) ₹54,000
d) ₹36,000
Ans – b)
X and Y are sharing profits and losses in the ratio of 3:2. Z is admitted with 1/5th share in profits of the firm which he gets entirely from X. Find out the new profit sharing ratio.
a) 12:8:5
b) 8:12:5
c) 2:2:1
d) 2:2:2
Ans – c)
The ratio in which a partner surrenders his share in favour of a partner is known as:
a) New profit sharing ratio
b) Sacrificing ratio
c) Gaining ratio
d) Capital ratio
Ans – b)
P and Q are in partnership sharing profits and losses in the ratio of 2:1 respectively. R joins the partnership for 1/5th share. The sacrificing ratio of P and Q after R’s admission is:
a) 2:1
b) 3:2
c) 4:3
d) 5:2
Ans – a)
Nikki and Tikki were partners sharing profits and losses in the ratio of 3:2. On 31st December 2019, the extract of their balance sheet is as follows:
Assets – Land and Building – 1,00,000
At the time of admission of new partner Chikki, if the value of land and building is to be appreciated by 10%, then what will be the amount of Land and Building which is to be shown in the new balance sheet?
a) ₹90,000
b) ₹1,00,000
c) ₹10,000
d) ₹1,10,000
Ans – d)
X, Y and Z are partners in the ratio of 3:2:1. W is admitted with 1/6th share in profits. Z would retain his original share. The new profit sharing ratio of X, Y and A and W is:
a) 4:3:2:2
b) 3:3:1:1
c) 12:8:5:5
d) 5:2:1:1
Ans – c)
Mona and Tina were partners in firm sharing profits in the ratio of 3:2. Naina was admitted with 1/6th share in the profits of the firm. At the time of admission, Workmen’s Compensation Reserve appeared in the Balance Sheet of the firm at ₹32,000. The claim on account of workmen’s compensation was determined at ₹40,000. Excess of claim over the reserve will be:
a) Credited to Revaluation Account
b) Debited to Revaluation Account
c) Credited to old partner’s capital Accounts
d) Debited to old partner’s capital Accounts
Ans – b)
Surya and Ishaan are partners. They admitted Hardik, At the time, there was a debit balance of profit and loss account in the balance sheet of ₹66,000. Journalise.
a) Surya’s Capital A/c Dr 33,000
Ishaan’s Capital A/c Dr 33,000
To Profit and Loss A/c 66,000
b) Profit and Loss A/c Dr 66,000
To Surya’s Capital A/c 33,000
To Ishaan’s Capital A/c 33,000
c) Surya’s Capital A/c Dr 22,000
Ishaan’s Capital A/c Dr 22,000
Hardik’s Capital A/c Dr 22,000
To Profit and Loss A/c 66,000
d) Profit and Loss A/c Dr 66,000
To Surya’s Capital A/c 22,000
To Ishaan’s Capital A/c 22,000
To Hardik’s Capital A/c 22,000
Ans – a)
In the case of workmen Compensation Reserve, if the amount claimed is more than the amount lying in WCR, then the shorfall will be recorded in :
a) Revaluation Account
b) Partner’s Capital Account
c) Balance Sheet
d) None of these
Ans – a)
A and B are partners sharing profits and losses in the ratio of 5:4. C is admitted for 1/5th share. A and B decide to share equally in future. Sacrificing ratio will.
a) 5:4
b) 2:7
c) 7:2
d) 1:1
Ans – c)
Dana and Lana were sharing profits in the ratio of 2:1. Jana was admitted for 1/3rd share and claim on workmen compensation reserve was ₹10,000. Journalise.
Liabilities – Workmens Compensation Reserve – ₹18,000
a) Workmen Compensation Reserve A/c Dr 18,000
To Dana’s Capital A/c 12,000
To Lana’s Capital A/c 6,000
b) Workmen Compensation Reserve A/c Dr 18,000
To Dana’s Capital A/c 8,000
To Lana’s Capital A/c 4,000
To Jana’s Capital A/c 6,000
b) Workmen Compensation Reserve A/c Dr 18,000
To Claim on Workmen compensation A/c 10,000
To Dana’s Capital A/c 5,333
to Lana’s Capital A/c 2,667
c) Workmen Compensation Reserve A/c Dr 10,000
To Claim on Workmen Compensation A/c 3,556
To Dana’s Capital A/c 1,778
To Jana’s Capital A/c 2,666
Ans – c)
X and Y are partners in a firm sharing profits and losses in the proportion of 2:1. They admit a new partner Z for 1/6th share in profit. What is the new profit sharing ratio of X, Y and Z?
a) 5:3:10
b) 2:1:6
c) 1:1:1
d) 10:5:3
Ans – d)
The Emi, Nemi and Kimi are partners sharing profits in the ratio of 5:3:2. They have admitted Vimi into the partnership for 1/6th share. An Extract of their balance sheet on 1st April 2020 is as follows
Liabilities – Investment Fluctuation Fund ₹27,000
Assets – Investment (Cost) ₹3,00,000
If the market value of investments is ₹2,90,000, then the investment fluctuation fund will be shown in the balance sheet of the firm at
a) ₹27,000
b) ₹20,000
c) ₹10,000
d) ₹13,000
Ans – c)
Sun and Star were partners in a firm sharing profits in the ratio of 2:1. Moon was admitted as a new partner in the firm. The new profit sharing ratio was 3:3:2. Moon brought the following assets towards his share of goodwill and his capital:
Machinery ₹2,00,000; Furniture ₹1,20,000; Stock ₹80,000; Cash ₹50,000. If his capital is considered as ₹3,80,000, the goodwill of the firm
will be:
a) ₹70,000
b) ₹2,80,000
c) ₹4,50,000
d) ₹1,40,000
Ans – b)
A and B are partners in the ratio of 3:1. C was admitted for 1/5th share and he could not bring his share of goodwill. Goodwill of the firm is valued at ₹1,00,000. Journalise.
a) Premium for Goodwill A/c Dr 1,00,000
To A’s Capital A/c 75,000
To B’s Capital A/c 25,000
b) C’s Capital A/c Dr 1,00,000
To A’s Capital A/c 75,000
To B’s Capital A/c 25,000
c) C’s Capital A/c Dr 20,000
To A’s Capital A/c 10,000
To B’s Capital A/c 10,000
d) C’s Capital A/c Dr 20,000
To A’s Capital A/c 15,000
To B’s Capital A/c 5,000
Ans – d)
X and Y are partners in a firm. They admit Z for 1/3 share. Z brought ₹2,00,000 as his capital and ₹60,000 for premium. Journalise the transaction.
a) Bank A/c Dr 2,60,000
To Z’s capital 2,00,000
To Premium for Goodwill A/c 60,000
b) Z’s Capital A/c Dr 2,00,000
To Bank A/c 2,00,000
c) Z’s Capital A/c Dr. 2,00,000
Premium for Goodwill A/c 60,000
To Bank A/c 2,60,000
d) Bank A/c Dr 2,00,000
To Z’s Capital A/c 2,00,000
Ans – a)
A and B are partners sharing profits in an equal ratio. A’s capital is ₹90,000 and B’s capital is ₹60,000. They admit C and agree to give 1/5th share in future profit. C brings ₹70,000 as his capital. Value of hidden goodwill at the time of admission of C is:
a) ₹70,000
b) ₹1,30,000
c) ₹3,50,000
d) ₹1,50,000
Ans – b)
X, Y and Z are partners sharing profits in the ratio of 3:2:1. They agree to admit ‘G’ into the firm. X, Y and Z agreed to give 1/3rd, 1/6th and 1/9th share of their profit. The share of profit of ‘G’ will be
a) 11/54
b) 13/54
c) 1/10
d) 12/54
Ans – b)
A and B are two partners sharing profits in the ratio of 2:1. C, a new partner admitted for 1/4th share. At the time of admission, loss from revaluation is ₹9,000. Pass a necessary journal entry for distribution of loss between the partners?
a) A’s Capital A/c Dr 6,000
B’s Capital A/c Dr 3,000
To Revaluation A/c 9,000
b) A’s Capital A/c Dr 9,000
To B’s capital A/c 9,000
c) Revaluation A/c Dr 9,000
To A’s Capital A/c 6,000
To B’s Capital A/c 3,000
d) B’s Capital A/c 9,000
To A’s Capital A/c 9,000
Ans – a)
