Assertion Reason MCQs of Admission of Partner Class 12

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We have compiled very important assertion reason-based Multiple Choice Questions of chapter 4 Admission of partner of volume 1 of Accountancy Class 12

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Assertion Reason Multiple Choice Questions of Admission of partner class 12

Let’s Practice

Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): Anahat and Parminder are partners sharing profits in the ratio of 2:1. They admit Rubayat as partner w.e.f. 1st January 2021. On that date, Goodwill existed in the books at ₹1,00,000. Goodwill of ₹50,000 was written off by debiting capital accounts of Anahat and Parminder in the ratio of 2:1. While balance goodwill was carried forward in the Balance Sheet.

Reason (R): Goodwill existing in the books is purchased goodwill and therefore, is not written off.

Alternatives:

a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
b) Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).
c) Assertion (A) is true but Reason (R) is False
d) Both Assertion (A) and Reason (R) are False.

Ans – d)
Explanation:- ₹1,00,000 goodwill must be written off from the books completely not partially. Thus both Assertion and Reason are false.

Assertion (A): If there are Eight partners in a firm, a new partner can not be admitted even if one partner does not agree to this.

Reason (R): A new partner can be admitted if majority of partners agree on his admission. In the context of the above two statements, which of the following is correct?

Options:

(a) (A) and (R) both are correct and (R) correctly explains (A)
(b) Both (A) and (R) are correct but (R) does not explain (A).
(c) Both (A) and (R) are incorrect
(d) (A) is correct but (R) is incorrect

Ans – d)
Explanation:-
As per the provisions of the partnership Act, 1932, All partners consent is mandatory to admit a new partner. If any one or more partner disagree, a new partner can not be admitted.

Assertion (A): Undistributed profits or losses appearing in the balance sheet at the time of admission should be transferred to the old partner’s capital/current account.

Reason (R): Undistributed profits or losses appearing in the balance sheet at the time of admission belong to the old partners as they are earned by them.

Alternatives:

Ans – a)
Explanation:- Undistributed Profits and losses in the balance sheet belongs to the old partners.

Assertion (A): Admission of a partner means reconstitution of the partnership whereby an old partnership ceases to exist and a new partnership comes into existence.

Reason (R): When a partner is admitted the number of partners increases and also the profit-sharing ratio changes. However, the firm continues. Thus, it is a reconstitution of partnership.

Alternatives:

Ans – a)

Assertion (A): A new partner becomes entitled to share future profits of the firm and also becomes liable for past losses of the firm.

Reason (R): A new partner acquires right in the assets and also becomes liabile to any liability incurred by the firm after his admission.

In the context of the above two statements, which of the following is correct?

Options:

(a) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(b) Both (A) and (R) are true and (R) is the correct explanation of (A).
(c) (A) is false but (R) is true
(d) (A) is true but (R) is false

And – c)
Explanation:-
A new partner has the right in future profits and Assets and liable to the future liabilities after his admission. But he is not liable to any liabilities before his admission and has no rights on profits

Assertion (A): Dev and Anil are partners sharing profits in the ratio of 3:2. They admit Ramesh into a partnership for 1/4th share on 1st April 2020. On that date, Deferred Revenue Expenditure existed in the books at ₹1,00,000. They carried it in the books of the firm because the expenditure will give benefit for the next five years.

Reason (R): Deferred Revenue Expenditure is written off on the reconstitution of the firm and is not carried forward.

Alternatives:

And – d)
Explanation:- All fictitious assets, accumulated profits and losses are written off at the time of reconstitution of the partnership in the absence of any other information.

Assertion (A): The amount of goodwill brought in by the new partner is divided between the existing partners in their sacrificing ratio.

Reason (R): The new partner acquires his/her share profit from the existing partners.

Alternatives:

Ans – a)
Explanation:-
the premium of goodwill is compensation against the share in profit purchased by the new partner. As the share is surrendered by the old partner in sacrificing ratio, thus premium of goodwill is credited to the old partner in same.

Assertion (A): Atul and Bhushan are partners sharing profits equally. They admit Bharat into partnership w.e.f 1st April 2021 for 1/5th share in profits. On that date, a debit balance in the Profit and Loss Account existed at ₹50,000. It will be written off to the capital accounts of Atul and Bhushan equally.

Reason (R): Debit balance in Profit and Loss Account is a fictitious asset and all fictitious assets are written off at the time of reconstitution of the firm to the capital accounts of old partners in the old profit sharing ratio.

Alternatives:

Ans – a)

Assertion (A): In case of admission of a partner old firm is dissolved and a new firm comes into existence.

Reason (R): After admission of a new partner, old partners along with the new partner constitute the new firm. As such, old firm is dissolved and a new firm comes into existence.

In the context of the above two statements, which of the following is correct?

Options:

(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
(b) Both (A) and (R) are correct but (R) is not the correct reason of (A).
(c) Only (R) is correct
(d) Both (A) and (R) are wrong

And – d)
Explanation:-
At the time of admission of a partner, firm is not dissolved, only the new partnership is constituted. the firm continues to exist with its existing capital, assets and liabilities.

Assertion (A): An increase in the value of assets and a decrease in the value of the liability at the time of admission of a partner is debited to the Revaluation Account.

Reason (R): Revaluation Account is nominal in nature.

Alternatives:

Ans – d)
Explanation:- Increase in value of assets and decrease in value of liabilities are credited to Revaluation A/c. Thus Assertion is false. The Revaluation Account is a nominal account as all expenses/losses are debited and all incomes/profits are credited. Thus reason is true.

Assertion (A): Admission of a partner is one of the modes of reconstitution of the partnership whereby old partnership ceases to exist and a new partnership comes into existence.

Reason (R): In case of admission of a partner number of partners increase and as a result profit sharing ratio also changes. But, the firm continues. As such, it is reconstitution of partnership.

In the context of the above two statements, which of the following is correct?

Options

(a) Both (A) and (R) are correct and (R) is the correct reason of (A)
(b) Both (A) and (R) are correct but (R) is not the correct reason of (A)
(c) Only (R) is correct
(d) Both (A) and (R) are wrong.

And – a)

Assertion (A): Preet and Shirin are equal partners. They admit Maira as a partner for 1/4th share in profits. Land of book value ₹3,00,000 is increased by ₹2,00,000 and computers of ₹2,00,000 were reduced to ₹1,00,000. The new value of land will be ₹5,00,000 and computers ₹1,00,000.

Reason (R): The expression ‘increased by’ means that much value is to be added to the book value of the asset. Therefore, the value of land will be ₹5,00,000. The expression ‘reduced’ means that it is the new value of the asset. Therefore, computers will be shown at ₹1,00,000.

Alternatives:

Ans – a)

Assertion (A): Admission of a partner leads to the dissolution of the old firm and bringing the new firm into existence.

Reason (R): As a result of admission of a partner, old partners along with the new partner constitute the new firm. Thus, old firms are dissolved and new firm comes into existence.

Alternatives:

Ans – d)
Explanationa:- As a result of admissionof a partner, only partnership agreement is dissolved not the firm.

Assertion (A): Admission of a partner leads to a situation where one or more partners forego their profit share in favour of the new partner.

Reason (R): New partners can be given additional profit shares while profit shares of old partners are not changed.

Alternatives:

Ans – c)
Explanation:- When new partner is admited into a firm. All old paratners or few old partners share is alwayws reduced.

Assertion (A): New partner should bring in his share of goodwill in cash so that the sacrificing partners may be compensated.

Reason (R): New partner may or may not bring his share of goodwill in cash. New Partner’s Current Account may be debited and sacrificing partners Capital Accounts credited to compensate them.

In the context of the above two statements, which of the following is correct?

Options:

(a) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(b) Both (A) and (R) are true and (R) is the correct explanation of (A).
(c) Both (A) and (R) are false.
(d) (A) is false, but (R) is true

And – d)

Assertion (A): Zubin and Zeenat are equal partners. They admit Ruksana into a partnership for 1/3rd share in profits. Reassessing the liabilities, it was found that sundry creditors of ₹1,00,000 are not payable and also there was an unrecorded liability of customer claims of ₹1,00,000, which is to be recorded. As a result of these adjustments, the loss on revaluation will be nil.

Reason (R): Sundry Creditors are reduced by ₹1,00,000 and a new liability of the same amount towards Customer Claims has arisen. As a result, there is neither gain (profit) nor loss on this account.

Alternatives:

Ans – a)

Assertion (A): A and B are partners sharing profits in 3 : 2. They admit C into partnership which he takes 1/6th from A and 1/12th from B. Goodwill existed in their books at ₹ 60,000. C brought ₹ 1,50,000 as premium for goodwill and after adjusting the existing goodwill of ₹ 60,000 the balance of ₹ 90,000 was distributed between A and B in the ratio 2 : 1.

Reason (R): Goodwill of ₹ 60,000 existing in the books was written off in old ratio and ₹ 1,50,000 brought in by C was distributed in sacrificing ratio of 2 : 1.

In the context of the above two statements, which of the following is correct?

Options:

(a) (A) and (R) both are correct and (R) correctly explains (A).
(b) Both (A) and (R) are correct but (R) does not correctly explain (A).
(c) Both (A) and (R) are incorrect
(d) (A) is incorrect but (R) is correct.

And – d)

Assertion (A): It is necessary to show the true position of the firm at the time of admission of a new partner.

Reason (R): The gain or loss on revaluation which is transferred to all the partner’s capital account in the new profit sharing ratio.

Alternatives:

Ans – c)
Explanation:- The gain or loss on revaluation is distributed among old partners in their old profit sharing ratio.

Assertion (A): X and Y were partners sharing profits in 2 : 1. Goodwill appeared in the books at ₹ 1,20,000. They admit Z as a new partner for 1/5th share which he acquired from X and Y in 3 : 2. Goodwill appearing in the books is not written off and was carried forward to the new Balance Sheet.

Reason (R): Goodwill existing in the books is purchased goodwill and hence, is not written off.

In the context of the above two statements, which of the following is correct?

Options:

(a) Both (A) and (R) are true, but (R) is not the correct explanation of (A).
(b) Both (A) and (R) are true and (R) is a correct explanation of (A)
(c) Both (A) and (R) are false.
(d) (A) is true, but (R) is false.

And – c)

Assertion (A): At the time of admission of a partner, the value of goodwill of the firm is determined because the new partner compensates the sacrificing partner or partners

Reason (R): Goodwill of the firm is valued at the time of admission of a partner because the new partner is the gaining Partner and he will compensate the Sacrificing Partner or Partners

Alternatives:

Ans – a)

Assertion (A): At the time of admission, assets are revalued and liabilities reassessed so that the incoming partner is not put to an advantage or disadvantage because of change in values.

Reason (R): Assets and liabilities at the time of admission are revalued/reassessed because increase or decrease in their values is for the period before admission or new partner and hence the gain or loss on revaluation is distributed in old partners in old ratio.

In the context of the above two statements, which of the following is correct?

Options

(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
(b) Both (A) and (R) are correct and (R) is not the correct reason of (A).
(c) Only (R) is correct
(d) Both (A) and (R) are wrong.

And – a)

Assertion (A): Admission of a partner does not mean dissolution of the firm but dissolution of old partnership.

Reason (R): Admission of a partner means reconstitution of the partnership whereby old partnership ceases to exist and new partnership comes into existence. However, the firm continues.

In the context of the above two statements, which of the following is correct?

Options:

(a) (A) and (R) both are correct and (R) correctly explains (A).
(b) Both (A) and (R) are correct and (R) does not explain (A)
(c) Both (A) and (R) are incorrect.
(d) (A) is correct but (R) is incorrect.

And – a)

Assertion (A): Workmen Compensation Reserve is a reserve created out of a firm’s profits to meet possible liability to pay compensation to employees if it arises.

Reason (R): Excess of workmen compensation Reserve over the Workmen Compensation claim is credited to all partners in their old profits sharing ratio.

Alternatives:

Ans – b)

Assertion (A): A and B are partners sharing profits equally. They admit C for 1/6th share. On that date Advertisement Suspense Account existed in their books at ₹ 2,00,000. It was carried forward to the new Balance Sheet since it is likely to give benefit to the firm for the next five years.

Reason (R): One-fifth of ₹ 2,00,000 was written off and the remaining amount was carried forward to the new Balance Sheet.

In the context of the above two statements, which of the following is correct?

Options:

(a) Both (A) and (R) are correct and (R) is the correct explanation of (A).
(b) Both (A) and (R) are correct but (R) is not the correct explanation of (A).
(c) Only (A) is correct.
(d) Both (A) and (R) are wrong.

And – d)
Explanation:-
All fictitious Assets are written off at the time of admission of a new partner.

Assertion (A): At the time of admission of a partner, the new partner should bring his share in goodwill in cash to compensate the sacrificing partner.

Reason (R): New partner may or may not bring his share of goodwill in cash to compensate the Sacrificing Partner or Partners. Sacrificing Partners may be compensated by debiting new partner’s Current Account and crediting Sacrificing Partner’s Capital Accounts.

Alternatives:

Ans – d)
Explanation:- It is not necessary to bring Premium of goodwill in cash, it can also be brought in kind apart from cash. and if not brought in cash, new partners current account can also be debited.

Assertion (A): A partner can admit a new partner to the firm.

Reason (R): A new partner can be admitted only when the existing partners unanimously agree to it.

Alternatives:

Ans – d)
Explanation:- To admit a new partner, all partner consent is needed

Assertion (A): Chetna and Divya are partners sharing profits in 2 : 1. They admit Esha as a new partner and the new profit sharing ratio was 3 : 2 : 1. On that date, a debit balance of ₹ 60,000 existed in their Profit & Loss Account. It will be written off between Chetna and Divya in 2 : 1.

Reason (R): Debit Balance in Profit and Loss Account is a fictitious asset and at the time of reconstitution of the firm all fictitious assets are written off to the Capital Accounts of old partners in old profit sharing ratio.

In the context of the above two statements, which of the following is correct?

Options:

(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
(b) Both (A) and (R) are correct but (R) is not the correct reason of (A)
(c) Only (R) is correct.
(d) Both (A) and (R) are wrong

And – a)

Assertion (A): Ajeet and Akash are partners sharing profits in the ratio of 3:2. They admit Prakash as a new partner for 1/4th share. Goodwill is valued at ₹1,00,000 and the new partner will compensate both Ajeet and Akash by crediting ₹25,000 in the ratio of 3:2.

Reason (R): Prakash has taken 1/4th share in profits and therefore he will bring 1/4th Goodwill, i.e., ₹25,000. Since, sacrificing Ratio or the new profit sharing ratio is not given, Ajeet and Akash have sacrificed in the ratio of 3:2. Therefore, they will be compensated in the ratio of 3:2.

Alternatives:

Ans – a)
Explanation:- In the absence of further information, sacrificing ratio is always equal to old ratio.

Assertion (A): When market value of Investments is more than the book value, the entire amount of Investment Fluctuation Reserve is credited to old partners in their old profit sharing ratio.

Reason (R): Investment Fluctuation Reserve is a reserve created out of past profits and hence distributed among old partners in their old ratio.

In the context of the above two statements, which of the following is correct?

Options:

(a) (A) and (R) both are correct and (R) correctly explains (A)
(b) Both (A) and (R) are correct but (R) does not explain (A).
(c) Both (A) and (R) are incorrect.
(d) (A) is correct but (R) is incorrect

And – a)

Assertion (A): A new partner may be admitted to supplement its existing resources.

Reason (R): When the firm requires additional capital or managerial help or both for the expansion of its business, a new partner is admitted.

Alternatives:

Ans – a)

Assertion (A): General Reserve is not distributed among the old partners but is carried forward in the Balance Sheet prepared after admission of a partner.

Reason (R): General Reserve is set aside out of past profits and therefore, it is distributed among old partners in their old profit sharing ratio.

Alternatives:

Ans – d)

Assertion (A): Revaluation A/c is prepared at the time of admission of a partner.

Reason (R): It is required to adjust the values of assets and liabilities at the time of admission of a partner, so that the true financial position of the firm is reflected.

In the context of the above two statements, which of the following is correct?

Options:

(a) Both (A) and (R) are correct and (R) is the correct reason of (A).
(b) Both (A) and (R) are correct but (R) is not the correct reason of (A).
(c) Only (R) is correct.
(d) Both (A) and (R) are wrong.

And – a)

Assertion (A): The new partner brings in a premium for goodwill.

Reason (R): The new partner is required to compensate the old partner’s for their loss of share in the profits of the firm.

Alternatives:

Ans – a)

Assertion (A): Ajay and Akansha are partners sharing profits in the ratio of 3:2. General Reserve existed in the books at ₹1,00,000. They admitted Amit as a partner for 2/5th share in profits. ₹50,000 was transferred to Workmen Compensation Reserve and the balance was transferred to Capital Accounts of Ajay and Akansha in the ratio of 3:2.

Reason (R): General Reserve is a free reserve and can be used for any purposes as is decided by the partners. The partners may transfer ₹50,000 to Workmen Compensation Reserve and transfer the balance of ₹50,000 to the Capital Accounts of Ajay and Akansha in the ratio of 3:2.

Alternatives:

Ans – a)

Assertion (A): Purchased goodwill may be accounted for in the books and shown as a liability.

Reason (R): Intangible assets should be recognized by fulfilling the criteria as recognized under AS – 26.

Alternatives:

Ans – d)
Explanation:- Purchased goodwill is shown as assets as per the AS – 26.

Assertion (A): Bhaskar, Suman, and Sumit are partners sharing profits equally. They admitted Sahil for 2/10th share and the new profit sharing ratio is 3:3:2. Workmen Compensation Reserve existed in the books at ₹2,00,000 and a claim by workers of ₹40,000 also existed. It was decided to provide for the claim. ₹1,60,000, the balance of Workmen’s Compensation Reserve will be transferred to the Capital Accounts of Bhaskar, Suman, and Sumit equally.

Reason (R): Workmen Compensation Reserve to the extent of ₹1,60,000 is a free reserve and is transferred to the Partner’s Capital Accounts in their old profit sharing ratio, it being a reserve set aside from past profits.

Alternatives:

Ans – a)

Assertion (A): The new partner is entitled to have any share in accumulated profits of the firm appearing in the books at the time of his admission.

Reason (R): The gain or loss on revaluation of each asset and liability is transferred to the capital accounts of the old partners in their old profits sharing ratio.

Alternatives:

Ans – d)
Explanation:- Accumulating profits belongs to old partners in their old profit sharing ratio. Revaluation profit and loss is distributed among old partners.

Assertion (A): Parul and Paresh are partners sharing profits equally. They admit Prerna for 1/4th share in future profits. On the date of admission, Workmen Compensation Reserve existed in the books at ₹1,00,000. A claim of ₹1,50,000 was made by a worker and was to be accounted for. The existing reserve of ₹1,00,000 will be distributed between Parul and Paresh and ₹1,50,000 being the claim account will be transferred to the debit of the Revaluation Account.

Reason (R): Workmen Compensation Reserve of ₹1,00,000 will be transferred to workmen’s Compensation Claim Account. In addition, ₹50,000 be debited to Revaluation Account and credited Workmen’s Compensation Claim Account.

Alternatives:

Ans – d)
Explanation:-
Journal entry
Workmen Compensation Reserve A/c Dr. 1,00,000
Revaluation A/c Dr. 50,000
To Workmen Compensation Claim A/c 1,50,000

Assertion (A): The new partner after his admission is entitled to share the future profits of the firm.

Reason (R): The new partner acquires his share in profits in the firm from the old partners

Alternatives:

Ans – a)

Assertion (A): Karan and Raman are equal partners. They admitted Param as a partner and their new profit sharing ratio was 2:2:1. The sacrificing ratio of Karan and Raman is 1:1

Reason (R): A change in the values of assets and liabilities is credited/debited to the Revaluation Account.

Alternatives:

Ans – b)
Explanation:-
Karan Sacrifices
= 1/2 – 2/5 = 1/10
Raman sacrifices
= 1/2 – 2/5 = 1/10
sacrificing ratio of Karan and Raman after making base equal
= 1/10 : 1/10 i.e., 1 : 1.
Thus Assertion (A) is true.
The increase/decrease in the value of Assets and liabilities is credited and decrease/increase in the value of Assets and liabilities is debited to Revaluation Account. But the reason (R) does not explain the Assertion (A) correctly.

Assertion (A): Jass and Reet are equal partners. They admit Harry as a partner for 1/6th share in future profits. Their profit sharing ratio after the admission of Harry is 3:2:1. As a result of this, the profit share of Jass has not changed.

Reason (R): The profit share of Jass before and after the admission of Harry has not changed. Before admission of Harry, his profit share was 1/2 and after admission also it is 3/6 or 1/2.

Alternatives:

Ans – a)

Assertion (A): In certain cases, the premium for goodwill paid by the incoming partner is not recorded in the books of accounts.

Reason (R): Sometimes, the incoming partner pays his share of goodwill privately to the sacrificing partners, outside the business.

Alternatives:

Ans – a)
Explanation:-
No adjustment Journal entry is passed for the Goodwill paid privately by the incoming partner.

Assertion (A): Gurman and Ravi are equal partners. They admitted Param as a partner and their new profit sharing ratio was 2:2:1. They revalued the assets and reassessed their liabilities. They did so because the new partner should not be at an advantage or disadvantage.

Reason (R): Assets and Liabilities that exist before admission of Param are revalued/reassessed because of an increase in value of assets and a decrease in value of liabilities and vice-versa is for the period before admission of Param. If the change in values are not accounted for, Param will be at an advantage or disadvantage.

Alternatives:

Ans – a)
Explanation:-
Change in the value of Assets and liabilities resulted in revaluation profit/loss that is credited/debited to the old partners as it belongs to the period before admission of the new partner.

Assertion (A): Ashish and Deepak were partners sharing profits and losses equally. They admit Vinod as a partner for 1/5th share. Goodwill was valued at ₹1,00,000. Ashish and Deepak will be compensated by Vinod paying goodwill of ₹10,000 each.

Reason (R): Both Ashish and Deepak have sacrificed equally. Sinch Vinod has taken 1/5th share from Ashish and Deepak in equal proportion, i.e., 1/10th share each, he will compensate each by paying goodwill of ₹10,000 being equal to 1/10th of ₹1,00,000.

Alternatives:

Ans – a)
Explanation:-
Ashish Premium for goodwill
= 1,00,000 x 1/5 = ₹ 20,000
Sacrificing ratio of Ashish and Deepak is 1 : 1
Ashish will be creidted
= 20,000 x 1/2 = ₹ 10,000
Deepak will be credited
= 20,000 x 1/2 = ₹ 10,000

Assertion (A): If the amount of any liability is understated, then the revaluation account will be debited to restore the liability’s amount to its actual value.

Reason (R): Increase in the amount of liability is a profit for the firm.

Alternatives:

Ans – c)
Explanation:-
Liability is understated imply that the liability was recorded with the less amount. Now the understated amount is debited to the revaluation account to increase the value of liability in the new Balance Sheet. Thus Assertion is true. Increase in the amount of liability is a loss to the firm. Thus Reason (R) is false.

Assertion (A): Hari and Nimrat are equal partners. They admit Kabir as a partner for 1/4th share. The value of assets was increased by ₹1,00,000 and an unrecorded liability of ₹40,000 was brought into books. The gain (profit) of ₹60,000 will be credited in the capital accounts of Hari and Nimrat equally.

Reason (R): Gain (profit) or loss on revaluation of assets and reassessment of liabilities is credited or debited to the capital accounts of old partners in their old profit sharing ratio.

Alternatives:

Ans – a)

Assertion (A): It is necessary to ascertain the new profit sharing ratio for old partners when a new partner is admitted.

Reason (R): New partner acquires his share from old partners which reduce old partner’s share in profits.

Alternatives:

Ans – a)

Assertion (A): Admission of partner does not mean the dissolution of the firm but the dissolution of old partnership and new partnership coming into existence.

Reason (R): Admission of a partner means reconstitution of the partnership whereby the firm continues

Alternatives:

Ans – a)

Assertion (A): Accrued income not recorded is shown in the credit of the Revaluation Account on the admission of a partner.

Reason (R): It, being, an income that is related to the period before admission of a partner. Thus, it is credited to Revaluation Account and net gain (profit) or loss of the Revaluation Account is transferred to the old partner’s capital accounts in their old profit sharing ratio.

Alternatives:

Ans – a)

Assertion (A): On admission of a partner, it is important to determine sacrificing and Gaining Ratios because sacrificing partner or partners are compensated by paying goodwill on the basis of the sacrificing ratio by the Gaining partners

Reason (R): Sacrificing partners are compensated by the Gaining Partners for the sacrifice made by each partner in their sacrificing ratio.

Alternatives:

Ans – a)

Assertion (A): Raj and Hasmukh are partners in a firm sharing profits and losses in the ratio of 2:1. They admit Garima as partner for 1/6th share. Thus, the new profit sharing ratio is 10:5:3.

Reason (R): Profit share sacrificed by Raj is 2/18 (1/6 × 2/3). Thus, his new profit share is 10/18 (2/3 – 2/18). Profit share sacrificed by Hasmuskh is 1/18 (1/6 × 1/3). Thus, his new profit share is 5/18 (1/3 – 1/18). New profit sharing ratio is 10:5:3.

Alternatives:

Ans – a)
Explanation:-
After making base equal new profit sharing ratio is
= 10/18 : 5/18 : 1/6 x 3/3
= i.e., 10 : 5 : 3

Assertion (A): 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 ₹60,000.

Reason (R): Profit shares sacrificed by Aditya and Shiv are 1/2th each as their profit sharing ratio was equal. Goodwill Premium brought by Naina is ₹1,20,000 which will be shared by Aditya and Shiv equally.

Alternatives:

Ans – a)
Explanation:-
In the absence of additional information about the profit share of new partner. Sacrificing ratio is always equal to the old ratio i.e., 1 : 1. Thus, Aditya will be credited
= 1,20,000 x 1/2 = ₹ 60,000

Assertion Reason MCQs of Admission of Partner Class 12

Assertion Reason Multiple Choice Questions of Admission of partner class 12

Anurag Pathak

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Assertion Reason Multiple Choice Questions of Admission of partner class 12

Anurag Pathak

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