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)
Retiring Partner is compensated for foregoing his profit share in favour of all or some of the partners who continue as partners. The Compensation is paid by the continuing partners in
(a) Profit-sharing ratio
(b) Gaining Ratio
(c) Capital Ratio
(d) Sacrificing Ratio
Ans:- (b)
Retiring partner is compensated for sacrificing his profit share in favour of Remaining or Continuing Partners, who compensate the retiring partner by paying premium for goodwill in
(a) Sacrificing Ratio
(b) Gaining Ratio
(c) Old Profit-sharing Ratio
(d) New Profit-sharing Ratio
Ans:- (b)
In 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:
(i) Interest @ 6% p.a. on the balance amount.
(ii) Share of profit earned proportionate to his amount outstanding to total capital of the firm.
(iii) 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)
Akul, Bikul and Chandan are partners, Chandan retires. Amount payable to him is ₹ 72,300. Required cash in hand is ₹ 20,000. Cash already in hand is ₹ 7,000. Akul and Bikul bring in the required amount in the ratio of 3 : 2. Akul brings in ₹ 51,180. How much Bikul will bring in?
(a) ₹ 34,120
(b) ₹ 34,210
(c) ₹ 33,120
(d) ₹ 34,100
Ans:- (a)
Goodwill/Premium for Goodwill, at the time of retirement of a partner is credited to the Capital/Current Account of
(a) All the partners (including Retiring partner)
(b) Continuing Partner
(c) Retiring Partner
(d) None of these
Ans:- (c)
Unrecorded assets at the time of retirement of a partner are
(a) Credited to Revaluation Account.
(b) Credited to Capital Account of the retiring partner only
(c) Debited to Revaluation Account
(d) Credited to Partner’s Capital Accounts
Ans:- (a)
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:- a)
Gaining Ratio is calculated as:
(a) New Profit-sharing Ratio – Old Profit-sharing Ratio;
(b) Old Profit-sharing Ratio – New Profit-sharing Ratio;
(c) New Profit-sharing Ratio – Sacrificing Ratio;
(d) New Profit-sharing Ratio – Gaining Ratio
Ans:- (a)
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)
Harish, Girish and Paresh were partners sharing profits in the ratio of 2 : 1 : 1. Paresh retired from the firm on 1st April, 2023 and Harish and Girish decided to share future profits equally. As on that date, goodwill of the firm was valued at ₹ 2,00,000. The amount of Goodwill that will be paid by Harish to Paresh will be:
(a) ₹ 50,000
(b) ₹ 1,00,000
(c) ₹ 75,000
(d) Nil
Ans:- (d)
Retirement of a partner will create a situation for the continuing partners, which is known as
(a) Dissolution of partnership
(b) Dissolution of partnership firm
(c) Winding up of business
(d) None of these
Ans:- (a)
Which of the following transactions is debited to Revaluation Account?
(a) Increase in the value of furniture
(b) Increase in Provision for Doubtful Debts
(c) Creditors discharged at a discount
(d) Loss on revaluation of all assets and reassessment of all liabilities
Ans:- (b)
Accumulated Profits are:
(a) Credited to continuing partner’ Capital Accounts in their new profit sharing ratio.
(b) Credited to continuing partners’ Capital Accounts in their old profit sharing ratio.
(c) Credited to all the partners’ Capital Accounts before reconstitution of the firm in their old profit-sharing ratio.
(d) debited to all the partners’ capital before reconstitution of the firm in their old profit-sharing ratio.
Ans:- (c)
An 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)
Accumulated losses are:
(a) debited to continuing partners’ Capital Accounts in their new profit-sharing ratio.
(b) debited to continuing partners’ Capital Accounts in their old profit-sharing ratio.
(c) debited to all the partners’ Capital Accounts before reconstitution of the firm in their old profit-sharing ratio.
(d) credited to all the partners’ Capital Accounts before reconstitution of the firm in their old profit-sharing ratio.
Ans:- (c)
Sonu, Monu and Gopal are partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. The extract of their Balance Sheet is as follows:
| Liabilities | ₹ | Assets | ₹ |
| Workmen Compensation Reserve | 48,000 |
On retirement of Sonu, liability for Workmen Compensation of ₹ 24,000 is to be accounted. Amount of Workmen Compensation Reserve to be shown in Balance Sheet of reconstituted firm will be:
(a) ₹ 48,000
(b) ₹ 72,000
(c) ₹ 24,000
(d) ₹ Nil
Ans:- (d)
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)
Amay, Bina and Chander are partners in a firm with capital balances of ₹ 50,000, ₹ 70,000 and ₹ 80,000 respectively on 31st March, 2022. Amay decides to retire from the firm on 31st March, 2022, with the help of the information provided, calculate the amount to be paid to Amay on his retirement. There existed a general reserve of ₹ 7,500 in the balance sheet on that date.
The goodwill of the firm was valued at ₹ 30,000.
Gain on revaluation was ₹ 24,000.
(a) ₹ 88,500
(b) ₹ 90,500
(c) ₹ 65,375
(d) ₹ 70,500
Ans:- (d)
Riya, Rita and Renu were partners in a firm. On 31st March, 2023, Renu retire. The amount payable to Renu ₹ 2,17,000 was transferred to her loan account. Renu agreed to receive interest on this amount as per the provisions of Parntership Act, 1932. The rate at which interest would be paid to Renu is
(a) 9% p.a.
(b) 6% p.a.
(c) 12% p.a.
(d) 10% p.a.
Ans:- (b)
Manav, Nath and Narayan are partners sharing profits and losses in the ratio of 4 : 3 : 2. Nath retired and goodwill of the firm is valued at ₹ 21,600. Following entry is passed for adjustment of goodwill:
Manav’s Capital A/c Dr. 3,900
Narayan’s Capital A/c Dr. 3,300
To Nath’s Capital A/c 7,200
(being Nath’s share of goodwill adjusted)
New profit-sharing ratio of Manav and Narayan will be
(a) 12 : 9
(b) 10 : 8
(c) 5 : 3
(d) 13 : 11
Ans:- (c)
On 1st April, 2024, Anil, Bimal and Seema were partners sharing profits in the ratio of 5 : 3 : 2 respectively. On this date, Bimal retired, New Profit-sharing ratio of Anil and Seema will be 3 : 2. Gaining ratio will be
(a) 2 : 1
(b) 5 : 2
(c) 1 : 1
(d) 1 : 2
Ans:- (d)
Rani, Adi and Manu are partners sharing profits and losses in the ratio of 5 : 3 : 2. Adi retired and goodwill of the firm is valued at ₹ 2,40,000.
Following entry is passed for adjustment of goodwill:
Manu’s Capital A/c Dr. 96,000
To Adi’s Capital A/c 72,000
To Rani’s Capital A/c 24,000
New Profit-sharing Ratio of Rani and Manu will be
(a) 1 : 2
(b) 2 : 1
(c) 2 : 3
(d) 3 : 2
Ans:- (c)
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)
A, B, C are partners. B retired and on the date of retirement, Workmen’s Compensation Fund was appearing in the books at ₹ 50,000. The claim on account of Workmen’s Compensation was ₹ 65,000. The excess claim will be
(a) Debited to Revaluation Account
(b) Credited to Revaluation Account
(c) Debited to Remaining partner’s Capital/Current Accounts in new profit-sharing ratio.
(d) Credited to Remaining partner’s Capital/Current Accounts in new profit-sharing ratio.
Ans:- (a)
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)
Anju, Divya and Bobby were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Bobby retired. The new profit sharing ratio between Anju and Divya after Bobby’s retirement was 5 : 3. The gaining ratio of remaining partners will be
(a) 3 : 2
(b) 2 : 3
(c) 3 : 1
(d) 5 : 3
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 3 : 2 : 1. B retires, and the balance of his Capital Account after adjusting reserves and his share of goodwill was ₹ 2,40,000. The remaining partners gave B an unrecorded vehicle valued at ₹ 60,000 and the balance payable to B was discharged by giving a Bank draft. What will be the amount of the Bank Draft?
(a) ₹ 1,80,000
(b) ₹ 2,40,000
(c) ₹ 2,60,000
(d) ₹ 2,00,000
Ans:- (d)
A, B and C are partners sharing profits in the ratio of 3:2:1. C retired, new profit sharing ratio will be
a) 1:3
b) 3:2
c) 1:1
d) None of these
Ans:- b)
Mita, Veena and Atul were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. Atul retired and his share was taken over by Mita and Veena in the ratio of 1 : 4. The new profit sharing ratio between Mita and Veena after Atul’s retirement will be
(a) 3 : 2
(b) 8 : 7
(c) 7 : 3
(d) 2 : 3
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 and losses in the ratio of 5 : 4 : 3. C retires and is credited for ₹ 9,000 as goodwill. How much will be debited to A in respect of goodwill adjustment?
(a) ₹ 20,000
(b) ₹ 16,000
(c) ₹ 5,000
(d) ₹ 4,000
Ans:- (c)
In case total amount or part amount is due to the retiring partner without an agreement among the partners then retiring partner will get
(a) Interest @ 6% p.a. on the opening outstanding amount.
(b) Share of profit earned proportionate to his amount outstanding to the capital of the firm
(c) Interest @ 9% p.a. on the balance amount.
(d) Interest will not be paid.
Ans – (b)
Ans:- (b)
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)
Ravi, Vani and Toni were equal partners in a firm. After the retirement of Vani, the capital balances of Ravi and Toni were ₹ 1,56,000 and ₹ 1,08,000 respectively. The new capital of the firm was determined at ₹ 2,80,000. It was decided that the capital will be in proportion of the profit-sharing ratio of the remaining partners. Toni will bring _ for deficiency of his new capital.
(a) ₹ 40,000
(b) ₹ 12,000
(c) ₹ 20,000
(d) ₹ 32,000
Ans:- (d)
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 are partners sharing profits in 7 : 3 : 2. C retires and his share was purchased by A and B by giving him ₹ 10,000 each from their Capital Accounts. What will be the new profit sharing ratio of A and B?
(a) 2 : 1
(b) 7 : 3
(c) 1 : 1
(d) 3 : 1
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)
A, B and C were partners. C retired. On the date of retirement, goodwill existed in the books at ₹ 90,000. On that date goodwill was valued at ₹ 4,50,000. Amount to be credited to C’s Capital Account is
(a) ₹ 1,80,000
(b) ₹ 1,50,000
(c) ₹ 1,20,000
(d) ₹ 30,000
Ans:- (b)
Retiring partner is compensated for parting 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) Sacrificing Ratio
d) Profit Sharing Ratio
Ans:- a)
Pari, Maira and Kabir were partners sharing profits in the ratio of 5 : 3 : 2. Pari retired and 4/5th of her profit-share is taken by Maira while Kabir takes her balance profit-share. New profit sharing ratio between Maira and Kabir will be
(a) 1 : 1
(b) 5 : 3
(c) 3 : 7
(d) 7 : 3
Ans:- (d)
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)
Amount credited to a retiring partner in his Capital Account is ₹ 2,01,000. He took over investment at ₹ 58,000. He also took over 20% debtors. The amount transferred to his loan account is ₹ 1,23,000. What is the total value of the debtors?
(a) ₹ 1,00,000
(b) ₹ 90,000
(c) ₹ 80,000
(d) ₹ 1,10,000
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 partners’ capital accounts in old ratio
b) Debited to all partners’ 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 on 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)
Gaurav, Sonu and Anita are partners in a firm sharing profits in the ratio of 4 : 3 : 2. Sonu retires and the balance in his Capital Account after making necessary adjustments on account of reserves, revaluation of assets and re-assessment of liabilities is ₹ 4,00,000. Gaurav and Anita agreed to pay him ₹ 4,60,000 in full settlement of his claim. Sonu’s share of goodwill of the firm, on his retirement is
(a) ₹ 20,000
(b) ₹ 60,000
(c) ₹ 1,80,000
(d) ₹ 1,20,000
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 existing in the Balance Sheet is written off by passing the following Journal entry:
(a) Goodwill A/c Dr.
To Partners’ Capital A/cs
(including Retiring Partner)
(b) Retiring Partner’s Capital A/c Dr.
To Goodwill A/c
(c) Partners’ Capital A/cs Dr.
To Goodwill A/c
(including retiring Partner)
(d) Continuing Partners’ Capital A/cs Dr.
To Goodwill A/c
Ans:- (c)
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 retirement of a partner, compensation paid to sacrificing partner as Goodwill is accounted by passing the following Journal entry:
(a) Goodwill A/c Dr.
To Retiring Partner’s Capital A/c
(b) Gaining Partners’ Capital A/cs Dr.
To Retiring Partners’ Capital A/c
(c) Gaining Partners’ Capital A/cs
To Goodwill A/c
(d) Retiring Partner’s Capital A/c Dr.
To Gaining Partners’ Capital A/cs
Ans:- (b)
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)
Dev, Anil and Aman were partners sharing profits in the ratio of 2 : 1 : 1. Anil retired from the firm on 1st April, 2023 and Dev and Aman decided to share future profits equally. As on that date, goodwill of the firm was valued at ₹ 1,00,000. The amount of Goodwill that will be paid by Aman to the retiring partner will be:
(a) ₹ 25,000
(b) ₹ 50,000
(c) ₹ 75,000
(d) ₹ 1,00,000
Ans:- (a)
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)
A, B and C are partners sharing profits in the ratio of 5 : 3 : 1. If new profit-sharing ratio between B and C. on the retirement of A, is 3 : 2, Gaining Ratio is
(a) 11 : 14
(b) 3 : 2
(c) 2 : 3
(d) 14 : 11
Ans:- (b)
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)
Akhil, Vipul and Ritvik were partners sharing profits in the ratio of 5 : 3 : 2. Akhil retired from the firm. On the date of retirement, Goodwill of the firm was valued at ₹ 5,00,000. Amount that will be debited to the capital accounts of Vipul and Ritvik will be
(a) Vipul – ₹ 1,00,000 and Ritvik – ₹ 1,50,000
(b) Vipul – ₹ 1,50,000 and Ritvik – ₹ 1,00,000
(c) Vipul – ₹ 1,25,000 and Ritvik – ₹ 1,25,000
(d) Vipul – ₹ 90,000 and Ritvik – ₹ 1,60,000
Ans:- (b)
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 and C are partners sharing profits in 5 : 3 : 2. C retires and his share was purchased by A and B by giving his C ₹ 10,000 each from their Capital Accounts. What will be the value of the goodwill of the firm?
(a) ₹ 20,000
(b) ₹ 1,00,000
(c) ₹ 50,000
(d) ₹ 1,20,000
Ans:- (d)
A, B and 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 and 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)
Param, Karam and Gurung were sharing profits in the ratio of 3 : 2 : 1. Param retired. karam and Gurung agreed to share profits and losses equally in future. As on the date of retirement, Goodwill is valued at ₹ 1,20,000. Amount of goodwill to be debited to Karam’s and Gurung’s Capital Accounts will be
(a) ₹ 25,000 and ₹ 35,000
(b) ₹ 20,000 and ₹ 40,000
(c) ₹ 30,000 and ₹ 30,000
(d) ₹ 40,000 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 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)
Prem, Dev and Ramesh were partners sharing profits and losses in the ratio of 5 : 3 : 2. Dev retired and his profit share is taken by Prem and Dev in the ratio of 2 : 1. New profit-sharing ratio between Prem and Dev is
(a) 3 : 7
(b) 7 : 3
(c) 2 : 8
(d) 8 : 2
Ans:- (b)
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 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)
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)
Axar, Yogesh and Zeeshan were partners sharing profits in the ratio of 3 : 2 : 1. Zeeshan retired and Axar and Yogesh took his profit share equally. New profit-sharing ratio of Axar and Yogesh will be
(a) 5 : 6
(b) 7 : 5
(c) 1 : 2
(d) 4 : 6
Ans:- (b)
X, Y and Z were partners in a firm sharing profits in the ratio of 2 : 2 : 1. Capital balances of X, Y and Z were ₹ 1,00,000, ₹ 1,40,000, ₹ 70,000. Y retired and General Reserve on the date of retirement was ₹ 50,000. If goodwill of the firm was valued at ₹ 60,000 and Profit revaluation was ₹ 15,000, amount due to Y will be
(a) ₹ 1,90,000
(b) ₹ 1,92,000
(c) ₹ 1,80,000
(d) ₹ 1,41,640
Ans:- (a)
Huma, Bhanu and Charu are partners sharing profits in the ratio of 2 : 1 : 1. Bhanu retired and new profit-sharing ratio will be
(a) 2 : 1
(b) 1 : 2
(c) 3 : 2
(d) 3 : 1
Ans:- (a)
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)
X, Y and Z were partners in a firm sharing profits in the ratio of 1/2 : 1/3 : 1/6 respectively. Z decided to retire from the firm. On the date of his retirement, ‘Workmen Compensation Reserve’ of ₹ 1,20,000 was appearing in the Balance Sheet of the firm. Claim on account of Workmen Compensation was determined at ₹ 67,500. Excess of reserve amount over the claim will be
(a) Debited to Revaluation Account
(b) Credited to Revaluation Account
(c) Debited to Partner’s Capital Account
(d) Credited to Partner’s Capital Account
Ans:- (d)
Pawan, Ayub and Rakesh were partners sharing profits in the ratio of 5 : 4 : 3. Ayub retired and the continuing partners decide to share future profits equally. Gaining Ratio is
(a) 5 : 3
(b) 1 : 1
(c) 1 : 3
(d) 3 : 1
Ans:- (c)
P, Q and R are partner sharing profits in the ratio of 5 : 4 : 3. Q retires and P and R decide to share profits equally. Gaining Ratio will be:
(a) 5 : 3
(b) 1 : 1
(c) 1 : 3
(d) 3 : 1
Ans:- (c)
Rey and Ley Associates is having three partners named as Rakesh, Leena and Sanjana. Their Capitals were ₹ 4,00,000; ₹ 2,40,000 and ₹ 1,60,000 respectively. Sanjana retired on March 31, 2023 and sold her share of profits by taking ₹ 30,000 from Rakesh and ₹ 20,000 from Leena, Determine the new ratio.
(a) 1 : 1
(b) 7 : 8
(c) 3 : 2
(d) 8 : 7
Ans:- (d)
On 1st April, 2024 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)
A, B and C are partners sharing profits in the ratio of 3 : 4 : 5. B retires and the goodwill of the firm is valued at ₹ 42,000. A and C decide to share profits in the ratio of 3 : 4. Journal entry will be:
(a)
A’s Capital A/c Dr. 6,000
C’s Capital A/c Dr. 8,000
To B’s Capital A/c 14,000
(b)
A’s Capital A/c Dr.7,500
C’s Capital A/c Dr. 6,500
To B’s Capital A/c 14,000
(c)
A’s Capital A/c Dr. 22,500
C’s Capital A/c Dr. 19,500
To B’s Capital A/c 42,000
(d) B’s Capital A/c Dr. 14,000
To A’s Capital A/c 7,500
To C’s Capital A/c 6,500
Ans:- (b)
A, B and C are partners in a firm sharing profit/loss in the ratio of 2 : 2 : 1. On March 31, 2024, C died. Accounts are closed on Dec., 31 every year. The sales for the year 2023 was ₹ 6,00,000 and the profits were ₹ 60,000. The sales for the period from Jan. 1, 2024 to March 31, 2024 were ₹ 2,00,000. The share of deceased partners 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)
___________ is opened to credit the share of profit of the deceased partner, till the time of death to his Capital Account.
(a) Profit and Loss Appropriation Account
(b) Profit and Loss Suspense Account
(c) Profit and Loss Account
(d) Profit and Loss Adjustment Account
Ans:- (b)
A, B, C are partners sharing profits in 7 : 3 : 2. C retires and his share was purchased by A and B by giving him (C) ₹ 10,000 each from their Capital A/cs. What will be the new profit sharing ratio of A and B?
(a) 2 : 1
(b) 7 : 3
(c) 1 : 1
(d) 3 : 1
Ans:- (a)
A, B, C are partners. B retired and on the date of retirement Workmen’s Compensation fund was appearing in the books at ₹ 50,000. The claim on account of workmen’s compensation was ₹ 65,000. The excess claim will be:
(a) Debited to Revaluation A/c
(b) Credited to Revaluation A/c
(c) Debited to Remaining partner’s Capital/Current A/cs in new ratio
(d) Credited to Remaining partner’s Capital/Current A/cs in new ratio
Ans:- (a)
Punit, Sujit and Jiten are partners sharing profits and losses in the ratio of 4 : 3 : 1. Sujit retires from the firm, selling his share of profit to Punit and Jiten for ₹ 1,50,000; ₹ 80,000 being paid by Punit and ₹ 70,000 by Jiten.
What is the new profit sharing ratio between the remaining partners?
(a) 4 : 1
(b) 7 : 3
(c) 8 : 7
(d) 1 : 1
Ans:- (b)
A firm has an unrecorded liability for workmen compensation of ₹ 10,000. The firm was not prudent enough to create a workmen compensation reserve. How will this liability be treated in the books of the firm at the time of retirement of a partner?
(a) By debiting it to the capital accounts of all the partners
(b) By crediting it to Revaluation A/c
(c) By debiting it to Revaluation A/c
(d) By debiting it to Workmen Compensation Reserve A/c
Ans:- (c)
G, S and T were partners sharing profits in the ratio 3 : 2 : 1. G retired and his dues towards the firm including Capital balance, Accumulated profits and losses share, Revaluation Gain amounted to ₹ 5,80,000. G was being paid ₹ 7,00,000 in full settlement. For giving that additional amount of ₹ 1,20,000, S was debited for ₹ 40,000. Determine goodwill of the firm.
(a) ₹ 1,20,000
(b) ₹ 80,000
(c) ₹ 2,40,000
(d) ₹ 3,60,000
Ans:- (c)
Nikhil, Akhil and Amber are partners in a firm. At the time of Akhil’s retirement, Amber takes over furniture of ₹ 12,000 at ₹ 10,000,
Choose the correct journal entry from the following options to record this adjustment:
(a) Debit Furniture Account ₹ 10,000; Credit Amber’s Capital Account ₹ 10,000.
(b) Debit Furniture Account ₹ 12,000; Credit Amber’s Capital Account ₹ 10,000; Credit Revaluation Account ₹ 2,000.
(c) Debit Amber’s Capital Account ₹ 10,000; Credit Furniture Account ₹ 10,000.
(d) Debit Amber’s Capital Account ₹ 10,000; Debit Revaluation Account ₹ 2,000; Credit Furniture Account ₹ 12,000.
Ans:- (d)
At the time of retirement, if nothing is mentioned about the payment made due to him, in which account, the amount will be transferred:
(a) Retiring Partners Current A/c
(b) Retiring Partners Capital A/c
(c) Retiring partners Loan A/c
(d) Retiring Partners Bank A/c
Ans:- (c)
Eena, Meena and Deeka are partners sharing profits and losses in the ratio 5 : 4 : 1. Meena retired on 31st March 2023 and her dues cam out to be ₹ 7,20,000. Amount of ₹ 1,20,000 was paid immediately and balance was to be paid in three equal annual instalments together with interest @ 10% per annum. Determine the amount payable to Meena on 31st March 2025.
(a) ₹ 2,00,000
(b) ₹ 2,60,000
(c) ₹ 2,40,000
(d) ₹ 2,88,000
Ans:- (c)
