150 MCQs of Retirement of Partner Accountancy class 12
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Multiple Choice Questions of Retirement of Partner chapter with answers of Accountancy class 12
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Which of the following statement is correct?
a) Goodwill at the time of retirement of a partner is credited to remaining Partner’s Capital Accounts in sacrificing ratio.
b) Goodwill at the time of retirement of a partner is credited to the remaining Partner’s Capital Accounts in gaining ratio.
c) Goodwill at the time of retirement of a partner is debited to the remaining partner’s capital accounts in sacrificing ratio.
d) Goodwill at the time of retirement of a partner to the extent of retiring partner’s share is debited to remaining partner’s capital accounts in gaining ratio.
Ans – d)
At the time of retirement of a partner, profit (gain) on revaluation will be credited to the Capital Accounts of
a) all partners in their old profit sharing ratio
b) the remaining partners in their old profit sharing ratio
c) the remaining partners in their old profit sharing ratio
d) the remaining partners in their new profit sharing ratio
Ans – b)
Increase in liability at the time of retirement of a partner is:
a) credited to Revaluation Account
b) debited to Revaluation Account
c) debited to Profit and Loss Account
d) debited to Profit and Loss Appropriation Account
Ans – b)
Increase in the value of assets at the time of retirement of a partner is
a) credited to Revaluation Account
b) debited to Revaluation Account
c) debited to Profit and Loss Account
d) debited to Profit and Loss Appropriation Account
Ans – a)
Decrease in liabilities at the time of retirement of a partner is
a) credited to Revaluation Account
b) debited to Revaluation Account
c) debited to Profit and Loss Account
d) debited to Profit and Loss Appropriation Account
Ans – a)
Decrease in the value of assets at the time of retirement of a partner is
a) Credited to Revaluation Account
b) debited to Revaluation Account
c) debited to Profit and Loss Account
d) debited to Profit and Loss Appropriation Acccount
Ans – b)
Gaining ratio is
a) Old profit share less new profit share
b) Old profit sharing ratio
c) New profit sharing ratio
d) New profit share less old profit share
Ans – d)
On the retirement of Hari from the firm of Hari, Ram and Sharma, the Balance Sheet showed a debit balance of ₹12,000 in the profit and Loss Account. For calculating the amount payable to Hari, this balance will be transferred.
a) to the credit of the capital accounts of Hari, Ram and Sharma equally.
b) to the debit of the capital accounts of Hari, Ram and Sharma equally.
c) to the debit of the capital accounts of Ram and Sharma equally
d) to the credit of the capital account of Ram and Sharma equally
Ans – b)
Amla, Bimla and Kavita were partners sharing profits and losses in the ratio of 4:3:1. Bimla retires and gives here share of profit to Amla for ₹3,600 and to Kavita for ₹3,000. The gaining ratio of Amla and Kavita will be:
a) 4:5
b) 2:1
c) 6:5
d) 4:1
Ans – c)
Srishti, Nitya and Anand were partners in a firm sharing profits and losses in the ratio
of 3:2:1. Srishti retired from the firm selling here share of profits ot Nitya and Anand in the ratio of 2:1. The new profit sharing ratio between Nitya and Anand will be
a) 3:2
b) 17:11
c) 2:1
d) 19:11
Ans – c)
A, B and C are partners sharing profits in the ratio of 3:2:1. C retired, new profit sharing ratio wil be
a) 1:3
b) 3:2
c) 1:1
d) None of these
Ans – b)
A, B and C are partners sharing profits in the ratio of 3:2:1, C retired, and new profit sharing ratio is 3:2. Gaining ratio will be
a) 3:2
b) 1:2
c) 2:1
d) None of these
Ans – a)
A, B and C are partners sharing profits in the ratio of 3:2:1, C retires, If A and B take the share of retiring partner equally, new profit sharing ratio will be
a) 7:5
b) 3:2
c) 1:1
d) None of these
Ans – a)
A, B and C are partners sharing profit and losses in the ratio of 2:2:1. B retired from the firm. At that time goodwill of the firm was valued at ₹30,000. What contribution has to be made by A and C to pay B?
a) ₹20,000 and ₹10,000
b) ₹15,000 and ₹15,000
c) ₹8,000 and ₹4,000
d) ₹6,000 and ₹6,000
Ans – c)
A, B and C are partners in the firm, sharing profits in the ratio of 2:2:1. Their capital
accounts stand as ₹50,000, ₹50,000 and ₹25,000, respectively. B retired from the firm and balance in the General Reserve on that date was ₹15,000. If goodwill of the firm is ₹30,000 and profit on revaluation is ₹7,050, what amount will be transferred to B’s Loan Account?
a) ₹50,820
b) ₹70,820
c) ₹8,820
d) None of these
Ans – b)
Retiring partner is compensated by the continuing partners in their
a) Gaining Ratio
b) Capital Ratio
c) Sacrificing Ratio
d) Profit Sharing Ratio
Ans – a)
Accumulated Profits on the retirement of a partner are
a) credited to all partner’s capital accounts in old profit sharing ratio
b) debited to all partner’s capital account in old profit sharing ratio
c) credited to remaining partner’s capital accounts in new profit sharing ratio
d) credited to remaining partners capital accounts in gaining ratio.
Ans – a)
A, B and C were partners in a firm sharing profits and losses in the ratio of 5:3:2. C retired and his capital balance after adjustments regarding reserves, accumulated profits/losses and his share of gain on revaluation was ₹2,50,000. C was paid ₹3,22,000 including his share of goodwill. The amount credited to C’s capital account, on his retirement, for goodwill will be
a) ₹72,000
b) ₹7,200
c) ₹24,000
d) ₹36,000
Ans – a)
Retiring partner is compensated for partin with the firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in:
a) Gaining Ratio
b) Capital Ratio
c) Sacrifing Ratio
d) Profit Sharing Ratio
Ans – a)
‘Gaining Ratio’ means:
a) Old Ratio – New Ratio
b) New Ratio – Old Ratio
c) Old Ratio – Sacrifcing Ratio
d) New Ratio – Sacrificing Ratio
Ans – b)
What treatment is made of accumulated profits and losses on the retirement of a partner?
a) Credited to all partner’s capital accounts in old ratio
b) Debited to all partner’s capital account in old ratio
c) credited to remaining partner’s capital accounts in new ratio
d) credited to remaining partner’s capital accounts in gaining ratio.
Ans – a)
At the time of retirement of a partner, profit or revaluation will be credited to:
a) Capital Account of retiring partner
b) Capital Accounts of all partners in the old profit sharing ratio
c) Capital Accounts of the remaining partners in their old profit sharing ratio
d) Capital accounts of the remaining partners in their new profit sharing ratio
Ans – b)
What journal entry will be recorded for writing off the goodwill already existing in Balance Sheet at the time of retirement of a partner?
a) Retiring Partner’s Capital A/c Dr.
To goodwill A/c
b) All partner’s Capital A/c (including retiring) Dr. (in old ratio)
To goodwill A/c
c) Remaining Partner’s Capital A/cs Dr. (in gaining ratio)
To goodwill A/c
d) Remaining Partner’ Capital A/cs Dr. (in new ratio)
To goodwill A/c
Ans – b)
What journal entry will be recorded for deceased partner’s share in profit from the closure of last balance sheet till the date of his death?
a) Profit and Loss A/c Dr.
To Deceased Partner’s Capital A/c
b) Deceased Partner’s Capital A/c Dr
To Profit and Loss A/c
c) Deceased Partner’s Capital A/c Dr
To Profit and Loss Suspence A/c
d) Profit and Loss Suspense A/c Dr
To Deceased partner’s Capital A/c
Ans – d)
On retirement of a partner, goodwill will be credited to the Capital Account of:
a) Retiring Partner
b) Remaining Partners
c) All Partners
d) None of the above
Ans – a)
On the death of a partner, the amount due to him will be credited to:
a) All partner’s Capital Accounts
b) Remaining Partner’s Capital Accounts
c) His Executor’s Account
d) Government’s Revenue Account
Ans – c)
How goodwill is recorded on the retirement of a partner?
a) Remaining Partner’s Capital A/cs Dr. (In gaining ratio)
To Retiring Partner’s Capital A/c (with his share of goodwill)
b) Remaining Partner’s Capital A/cs Dr. (In New Ratio)
To Retiring Partner’s Capital A/c (with his share of goodwill)
c) Goodwill A/c Dr.
To All Partner’s Capital A/cs (In Old Ratio)
D) Goodwill A/c Dr
To Retiring Partner’s Capital A/c (with his share)
Ans – a)
A, B and C are partners in 3:4:2. B wants to retire from the firm. The profit on revaluation on that date was ₹36,000. New ratio of A and C is 5:3. Profit on revaluation will be distributed as:
a) A ₹16,000; B ₹12,000: C ₹8,000
b) A ₹12,000; B ₹16,000: C ₹8,000
c) A ₹22,500; C ₹13,500
d) A ₹23,625; C ₹12,375
Ans – b)
A, B and C are partners sharing profits in the ratio of 5:2:1. If the new ratio on the retirement of A is 3:2, what will be the gaining ratio?
a) 11:14
b) 3:2
c) 2:3
d) 14:11
Ans – d)
P, Q and R are partners shairng profits in the ratio of 5:4:3. Q retires and P and R decide to share future profits equally. Gaining ratio will be:
a) 5:3
b) 1:1
c) 1:3
d) 3:1
Ans – c)
A, B and C are partners sharing profits in the ratio of 1/2:1/4:1/4. New ratio on the retirement of B will be:
a) 2:4
b) 1:2
c) 2:1
d) 1/4:1/2
Ans – c)
A, B and C are partners sharing profits in the ratio of 1/4:3/10:9/20. The New ratio on the retirement of C will be:
a) 6:5
b) 5:6
c) 4:3
d) 4:10
Ans – b)
X, Y and Z have been sharing profits in the ratio of 4:2:1. Z retires, X and Y take Z’s share equally. New profit sharing ratio will be:
a) 5:2
b) 5:3
c) 9:5
d) 4:2
Ans – c)
P, Q and R have been sharing profits and losses in the ratio of 5:3:2. Q retires. His share is taken by P and R in the ratio of 2:1. New profit sharing ratio will be:
a) 6:4
b) 7:3
c) 7:2
d) 6:3
Ans – b)
A, B and C share profits and losses of the firm equally. B retires from business and his share is purchased by A and C in the ratio of 2:3. New profit sharing ratio between A and C respectively would be:
a) 01:01
b) 02:02
c) 07:08
d) 03:05
Ans – c)
P, Q and R have been sharing profits in the ratio of 8:5:3. P retires, Q takes 3/16th share from P and R takes 5/16th share from P. New profit sharing ratio will be:
a) 1:1
b) 10:6
c) 9:7
d) 5:3
Ans – a)
A, B and C are equal partners. C retires. He surrenders 3/5th of his share in favour of A and 2/5th in favour of B. New ratio will be:
a) 3:2
b) 8:7
c) 7:8
d) 2:3
Ans – b)
P, Q and R are partners sharing profits in the ratio of 4:3:2. Q retires and his share was taken up by P and R in the ratio 3:2. New profit sharing ratio will be:
a) 16:29
b) 29:16
c) 3:2
d) 2:3
Ans – b)
Srishti, Nitya and Anand were partners in a firm sharing profits and losses in the ratio
of 3:2:1. Srishti retired fromf the firm selling her share of profits to Nitya and Anand in the ratio of 2:1. The new profit sharing ratio between Nitya and Anand will be:
a) 3:2
b) 17:11
c) 2:1
d) 19:11
Ans – c)
Amla, Bimla and Kavita were partners sharing profits and losses in the ratio of 4:3:1. Bimla retired and gives her share of profit to Amla for ₹3,600 and to Kavita for ₹3,000. The gaining ratio of Amla and Kavita will be:
a) 4:5
b) 2:1
c) 6:5
d) 4:1
Ans – c)
L, P and G are three partners sharing profits in the ratio 15:9:8. G retires, L and P decided to share profits in equal ratio. Gaining ratio will be:
a) 15:9
b) 9:15
c) 7:1
d) 1:7
Ans – d)
On 1st April, 2019 A, B and C were partners sharing profits and losses in the ratio of 5:3:2 respectively. On this date B retires. The new profit sharing ratio of A and C will be 3:2. Gaining ratio will be:
a) 1:2
b) 2:1
c) 1:1
d) 5:2
ans – a)
B, P and L sharing profits in the ratio 4:3:2. B retires, P and L decided to share profits in future in the ratio of 5:3. Gaining ratio will be:
a) 11:21
b) 21:11
c) 11:13
d) 13:11
Ans – b)
P, Q and R were partners sharing profits in the ratio 2:2:1. Q retires and the new profit sharing ratio of P and R will be 3:1. Gaining ratio will be:
a) 1:7
b) 2:1
c) 1:2
d) 7:1
Ans – d)
A, B and C are equal partners in a firm. B retires and the remaining partners decide to share the profits of the new firm in the ratio of 5:4. Gaining ratio will be:
a) 1:1
b) 1:2
c) 2:1
d) 5:4
Ans – c)
A, B and C are partners sharing profit or loss in the ratio of 3:2:1. B retires and after’s B’s retirement A and C agreed to share profit or loss in the ratio of 3:2 in future. Their
gaining ratio will be:
a) 3:1
b) 1:3
c) 3:7
d) None of the above
Ans – c)
A, B anc C are partners sharing profit or loss in the ratio of 4:3:2. C retires and after C’s retirement A and B agreed to share profit or loss in the ratio of 4:3 in future. Their gaining ratio will be:
a) 3:2
b) 4:3
c) 3:4
d) 1:1
Ans – b)
A, B and C are partners sharing profit or loss in the ratio of 2:3:4. A retires and after A’sretirement B and C agreed to share profit or loss in the ratio of 3:4 in future. Thir gaining ratio will be:
a) 2:3
b) 4:3
c) 3:4
d) 1:1
Ans – c)
A, B anc C were partners in a firm sharing profits and losses in the ratio of 2:2:1. The capital balance are ₹50,000 for A, ₹70,000 for B, ₹35,000 for C. B decided to retire from the firm and balance in reserve on the date was ₹25,000. If goodwill of the firm was valued at ₹30,000 and profit on revaluation was ₹7,500 then, what amount will be payable to B?
a) ₹70,820
b) ₹76,000
c) ₹75,000
d) ₹95,000
Ans – d)
P, Q and R are sharing profits and losses equally. R retires and the goodwill is appearing in the books at ₹30,000. Goodwill of the firm is valued at ₹1,50,000. Calculate the net amount to be credited to R’s Capital A/c
a) ₹60,000
b) ₹50,000
c) ₹40,000
d) ₹10,000
Ans – c)
Ram, krishna and Ganesh were sharing profits and losses in the ratio of 5:3:2. Ram retires and Krishna and Ganesh share in future profits and losses equally. Goodwill of the firm is valued at ₹1,00,000. Calculate the amount of goodwill to be debited to Krishna’s and Ganesha’s Capital A/c
a) ₹60,000 and ₹40,000
b) ₹20,000 and ₹30,000
c) ₹40,000 and ₹60,000
d) ₹30,000 and ₹20,000
Ans – b)
A, B and C are partners with profit sharing ratio 4:3:2. B retires and goodwill was valued ₹1,08,000. If A and C share profits in 5:3, find out the goodwill share by A and C in favour of B.
a) ₹22,500 and ₹13,500
b) ₹16,500 and ₹19,500
c) ₹67,500 and ₹40,500
d) ₹19,500 and ₹16,500
Ans – d)
A, B and C are partners in a firm sharing profits/loss in the ratio of 2:2:1. On March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2018 was ₹6,00,000 and the profits were ₹60,000. The sales for the period from Jan. 1, 2019 to March 31, 2019 were ₹2,00,000. The share of deceased partner in the current year’s profits on the basis of sales is:
a) ₹20,000
b) ₹8,000
c) ₹3,000
d) ₹4,000
Ans – d)
A, B and C were partners shairng profits and losses in the ratio of 2:2:1. Books are closed on 31st March every year. C dies on 5th Novemeber, 2018. Under the partnership deed, the executors of the deceased partner are entitled to his share of profit to the date of death, calculated on the basis of last year’s profit. Profit for the year ended 31st March, 2018 was ₹2,40,000. C’s share of
profit will be:
a) ₹28,000
b) ₹32,000
c) ₹28,800
d) ₹48,000
Ans – c)
P, Q and R were partners sharing profits in the ratio of their capital contribution which were ₹6,00,000; ₹4,00,000 and ₹5,00,000 respectively. Their book are closed on 31st March every year. P dies on 24th August, 2018. Under the partnership deed, deceased partner is entitled to his share of profit/loss to the date of death based on the average profits of preceding three years. Profits were 2015 ₹50,000; 2016 ₹1,80,000 (Loss); 2017 ₹30,000 and 2018 ₹60,000. P’s share of
profit/loss will be:
a) (₹3,200)
b) (₹6,400)
c) (₹12,000)
d) (₹4,800)
Ans – d)
At what rate is interest payable on the amount remaining unpaid to the executor of deceased partner, in absence of any agreement among partners when he opts for interest and not share of profit:
a) 12% p.a.
b) 8% p.a.
c) 6% p.a.
d) 7.5% p.a.
Ans – c)
A, B and C are partners in a firm sharing profit/Loss in the ratio of 3:2:1. On March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2018 was 10,00,000 and the profits were 2,00,000. The sales for the period from Jan. 1, 2019 to March 31, 2019 were ₹3,00,000. The share of deceased partner in the current year’s profits on the basis of sales is:
a) ₹2,500
b) ₹10,000
c) ₹15,000
d) ₹60,000
Ans – b)
A, B and C were partners in a firm shairng profits and losses in the ratio of 5:3:2. C retired and his capital balance after adjustments regarding reserves, accumulated profits/losses and his share of gain on revalutaion was ₹2,50,000. C was paid ₹3,22,000 includeing his sahre of goodwill. The amount credited to C’s Capital Account, on his retirement, for goodwill will be:
a) ₹72,000
b) ₹7,200
c) ₹14,400
d) ₹3,22,000
Ans – a)
In the case of retirement, if full or part of the amount payable to the retiring partner still remains to be paid, and there is no agreement among the partners then retiring partner will get:
a) Interest @6% p.a. on the Balance amount
b) Share of profit earned proportionate to his amount outstanding to total capital of the firm
c) Interest @9% p.a. on the balance amount
d) Interest @9% p.a. on the balance amount
Which out of the following is correct?
a) i
b) ii
c) iii
d) Have a choice to get either i) or ii)
Ans – d)
Rajat, Mishi and Tanvi were partners in a firm sharing profits and losses in the ratio of 5:3:2. Tanvi died on 31st October, 2019. According to the partnership agreement, her share of profits from the closure of last accounting year till the date of her death was to be calculated on the basis of aggregate profits of two completed years before death. Profits of the firm for the years ending 31st March 2018 and 31st March, 2019 were ₹57,000 and ₹63,000 respectively. The firm closes its books on 31st March every year. Tanvi’s share of profits till the date of her death will be:
a) ₹24,000
b) ₹7,000
c) ₹14,000
d) ₹12,000
Ans – c)
A, B and C are sharing profits in the ratio of 3:2:1. B retires and on the day of B’s retirement Goodwill is valued at ₹60,000. A and C decided to share future profits in the ratio of 3:2. Journal entry will be:
a) A’s Capital A/c Dr. 18,000
C’s Capital A/c Dr. 42,000
To B’s Capital A/c 60,000
b) A’s Capital A/c Dr. 6,000
C’s Capital A/c Dr. 14,000
To B’s Capial A/c 20,000
c) A’s Capital A/c Dr. 36,000
C’s Capital A/c Dr. 24,000
To B’s Capital A/c 60,000
d) A’s Capital A/c Dr. 12,000
C’s Capital A/c Dr. 8,000
To B’s Capital A/c 20,000
Ans – b)
P, Q and R share profits in the ratio of 5:4:3. R retires and the new ratio is 5:3. If R is given ₹6,000 as goodwill, journal entry will be:
a) P’s Capital A/c Dr. 1,000
Q’s Capital A/c Dr. 5,000
To R’s Capital A/c 6,000
b) P’s Capital A/c Dr. 5,000
Q’s Capital A/c Dr. 1,000
To R’s Capital A/c 6,000
c) P’s Capital A/c Dr. 3,750
Q’s Capital A/c Dr. 2,250
To R’s Capital A/c 6,000
d) P’s Capital A/c Dr. 3,333
Q’s Capital A/c Dr. 2,667
To R’s Capital A/c 6,000
Ans – b)
X, Y and Z were partners in a firm sharing profits in the ratio of 3:2:1. X retired and the new profit sharing ratio between Y and Z will be 5:4. On X’s retirement the goodwill of the firm was valued at ₹54,000. Journal entry will be:
a) Y’s Capital A/c Dr. 24,000
Z’s Capital A/c Dr. 30,000
To X’s Capital A/c 54,000
b) Y’s Capital A/c Dr. 15,000
Z’s Capital A/c Dr. 12,000
To X’s capital A/c 27,000
c) Y’s Capital A/c Dr. 12,000
Z’s Capital A/c Dr. 15,000
To X’s Capital A/c 27,000
d) X’s Capital A/c Dr. 27,000
To Y’s Capital A/c 12,000
To Z’s Capital A/c 15,000
Ans – c)
P, Q and R were partners sharing profits in the ratio 5:3:2 respectively. P retires from the firm and Q and R decide to share profits equally. Goodwill is valued at ₹50,000.
Adjustment entry for goodwill will be:
a) Q’s Capital A/c Dr. 15,000
R’s Capital A/c Dr. 10,000
To P’s Capital A/c 25,000
b) Q’s Capital A/c Dr. 20,000
R’s Capital A/c Dr. 30,000
To P’s Capital A/c 50,000
c) Q’s Capital A/c Dr. 12,500
R’s Capital A/c Dr. 12,500
To P’s Capital A/c 25,000
d) Q’s Capital A/c Dr. 10,000
R’s Capital A/c Dr. 15,000
To P’s Capital A/c 25,0000
Ans – d)
X, Y and Z are partners sharing profits in the ratio of 2:3:5. Goodwill is already appearing in their books at a value of ₹60,000. X retires and Y and Z decided to share future profits equally. Journal entry will be:
a) Y’s Capital A/c Dr. 12,000
To X’s Capital A/c 12,000
b) Y’s Capital A/c Dr. 60,000
To X’s Capital A/c 60,000
c) X’s Capital A/c Dr. 2,400
Y’s Capital A/c Dr. 3,600
Z’s Capital A/c Dr. 6,000
To Goodwill A/c 12,000
d) X’s Capital A/c Dr. 12,000
Y’s Capital A/c Dr. 18,000
Z’s Capital A/c Dr. 30,000
To Goodwill A/c 60,000
Ans – d)
