CBSE Questions for Class 12 Commerce Accountancy Reconstitution Of A Partnership Firm - Admission Of A Partner Quiz 1 - MCQExams.com

Sales for the year ended amounted to Rs. 10,00,Sales included goods sold to Mr.A for Rs. 50,000 at a profit of 20% on cost.Such goods are still lying in the godown at the buyer's risk. Such goods should be treated as part of :
  • Sales
  • Closing stock
  • Goods in transit
  • Sales return
A, B, C were partners sharing profits in the proportion of 1/2, 1/3 and 1/6 respectively. On 31st March 1997 their capital stood as follows:
    A Rs. 4,00,000, B Rs. 3,00,000, C Rs. 2,50,000.
A sum of 1,20,000, also appeared as reserve fund in their balance sheet on this date. B retire on this date when the goodwill of firm was valued at Rs. 1,80,000.
Profit and loss adjustment account prepared on that date without taking goodwill and reserve fund into consideration showed a net profit of Rs. 28,500.
The net amount payable to B will be :
  • Rs. 3,82,500
  • Rs. 4,09,500
  • Rs. 3,63,800
  • Rs. 4,04,000
After crediting the ______ partners by the amount of goodwill brought in by the ______ partner, the existing goodwill must be written off by debiting the old partners in their old profit sharing ratio. 
  • old, old
  • new, old
  • old, new
  • none of the above
Ram of Bombay sends out goods costing 80,000 to Mohan of Kanpur so as
to show 20% profit on invoice value. 3/5th  of the goods received by consignee is sold at 5% above invoice price. The amount of sale value will be:
  • 63,000
  • 60,000
  • 50,400
  • 40,000
The capital of A and B sharing profits and losses equally are Rs.90,000 and Rs.30,000 respectively.They value the goodwill of the firm at Rs.80,000, which was not recorded in the books.If goodwill is to be raised now, by what amount each partner's capital amount will be debited?
  • Rs. 20,000 and Rs.60,000
  • Rs. 40,000 and Rs.40,000
  • Rs. 60,000 and Rs.20,000
  • None of these
The profits for 1998-99 are Rs.2,000; for 1999-2000 Rs.26,100 and for 2000-01 Rs.31,Closing stock for 1999-2000 and 2000-01 includes the defective items of Rs. 2,200 and Rs. 6,200 respectively which were considered as having market value NIL.Calculate the goodwill on two years' purchase of average profit.
  • Rs.47,400
  • Rs.35,400
  • Rs.27,400
  • Rs.34,600
The profits and losses for the last years are: 2001-02 Losses Rs. 10,000; 2002-03 Losses Rs. 2,500; 2003-04 Profits Rs. 98,000 and 2004-05 Profits Rs. 76,The average capital employed in the business is Rs. 2,00,The rate of interest expected from capital invested is 12%. The remuneration of partners is estimated to be Rs. 1,000 per month. Calculate the value of goodwill oh the basis of two yearspurchase of super profits based on the average of four years.
  • Rs. 9,000
  • Rs.8,750
  • Rs. 8,500
  • Rs. 8,250
P/L Appropriation Account is prepared _______________.
  • Sole Trader Firm
  • Partnership Firm
  • Both a and b
  • None of these
In the absences of an agreement, Interest on loan advanced by the partner to the firm is allowed at the rate of _____.
  • 6%
  • 7%
  • 12%
  • 9%
If vendors are issued fully paid shares of $$Rs. 80,000$$ in the consideration of net assets of $$Rs. 60,000$$, then the balance of $$Rs. 20,000$$ will be _____________________.
  • Debited to profit and loss account
  • Debited to goodwill account
  • Credited to capital reserve account
  • Credited of share premium account
Which of the following formula is used to calculate goodwill under super profit method?
  • Goodwill = Weighted average profit x No. of year purchase.
  • Goodwill = Average profit x No. of year purchase.
  • Goodwill = Super profit x No. of year purchases.
  • Any of the above.
The remuneration of an auditor of a partnership firm is fixed by ___________________.
  • The Partnership Act
  • The Companies Act
  • The Government
  • None of the above
Which of the following formula is used to calculate goodwill under weighted average profit method ?
  • Goodwill = Weighted average profit x no. of year purchase.
  • Goodwill = Average profit x no. of year purchase.
  • Goodwill = Super profit x no. of year purchase.
  • Goodwill = Super profit x Annuity factor.
Under revaluation method, __________ account is credited in their profit sharing ratio when no goodwill exists in the books at the time of admission of a new partner.
  • goodwill
  • old partners' capital
  • new partners' capital
  • old partners' current
In which of the following cases, the need for the valuation of goodwill in a firm may arise?
  • Admission of new partner.
  • While changing profit sharing ratio.
  • Retirement or death of a partner.
  • All of above.
Which of the following formula is used to calculate goodwill under simple average profit method?
  • Goodwill = Weighted average profit x No. of year purchase.
  • Goodwill = Average profit x No. of year purchase.
  • Goodwill = Super profit x No. of year purchases.
  • Goodwill = Super profit x Annuity factor.
General Reserve at the time of admission of a partner is transferred to ____________ .
  • Revaluation Account
  • Old Partner's Capital Account
  • Capital Accounts of all partners, including new partner
  • None of the above
If the incoming partner is to bring in premium for goodwill in cash and also balance exist, in the goodwill Account, then this Goodwill Account is written off among the old partners in _________ .
  • the new profit-sharing ratio
  • the old profit-sharing ratio
  • the sacrifice ratio
  • none of the above
$$Z$$ is admitted to a firm for $$1/4^{th}$$ share in the profit, for which he brings in Rs.$$10,000$$ towards premium for goodwill. It will be taken by the old partners in ____________ .
  • The old profit-sharing ratio
  • The new profit-sharing ratio
  • The sacrificing ratio
  • None of the above
'Samta Limited invited applications for issuing $$6,750$$ equity shares of $$Rs 10$$ each. The amount was payable as follows :  On application - $$Rs 3$$ per share 
On allotment - $$Rs 5$$ per share
On first and final call - $$Rs 2$$ per share 
The issue was fully subscribed. Subhash applied for $$250$$ shares and paid his entire share money with application. Moti applied for $$175$$ shares and paid allotment money also with application. The amount received with applications was :
  • $$Rs 16,750 $$
  • $$Rs 16,000$$
  • $$Rs 19,250$$
  • $$Rs 22,875$$
State whether the following statements are True and False.
When goodwill is paid privately, its entry in the books of accounts is not required.
  • True
  • False
Partnership comes into existence through _______________.
  • Introduction
  • Promotion
  • Contract
  • Situation
Factor(s) affecting the value of goodwill is/are _____________.
  • Quality
  • Location or site
  • Competition
  • All the above
The formula of average profit method is __________.
  • $$\dfrac {Total\ Profits}{No. of \ years}$$
  • Super Profit $$-$$ Normal Profit
  • Super Profit $$\times$$ No. of years
  • $$\dfrac {Super\ profit}{Normal\ profit}$$
'Dogs' is applicable in case of professional services like ______________.
  • Lawyers
  • Doctors
  • Traders
  • Both (A) and (B)
Which method is useful when the actual profit is less than normal profit?
  • Super profit method
  • Capitalisation method
  • Average profit method
  • Premium method
The formula of super profit is ____________.
  • $$\dfrac {Total\ profits}{No. of\ years}$$
  • Capital employed $$\times$$ normal rate of return
  • Average profit $$-$$ normal Profit
  • Super profit $$\times$$ no. of years of purchase
When the amount of goodwill is paid privately, the following entries are to be passed for this purpose:
  • Cash account To Goodwill account (amount of goodwill brought in by new partner)
  • Goodwill account To Old partners Capital account (shared in the sacrificing ratio)
  • Both (A) and (B)
  • No entry is required
Which of the following are true or false?
a) A retiring partner will be held liable for the debts incurred by the firm after his retirement.
b) He must give public notice to that effect
  • Both (A) and (B) are true
  • Both (A) and (B) are false
  • (A) is true, but (B) is false
  • (A) is false, but (B) is true
Goodwill means ___________.
  • the attractive force which brings in customers
  • attachment of customer to a particular business
  • reputation of the firm
  • all of the above
Liquidation expenses paid by the transferee company is debited to _________.
  • General reserve account
  • P/L account
  • Goodwill account
  • None of these
The excess of purchase consideration over net assets of the transferor company acquired by the transferee company should be recognized as ________ in purchase method.
  • capital reserve
  • general reserve
  • goodwill
  • P&L
If the purchase price exceeds the net assets taken over, the difference is treated as ___________.
  • Capital given
  • Goodwill
  • Capital reserve
  • Capital loss
________  may be defined as the value of the reputation of the firm.
  • Capital
  • Goodwill
  • Drawings
  • Assets
When an incoming partner purchases his share from any one of the existing partners, then:
  • Total assets of the firm do not change
  • Total assets of the firm will be augmented to the extent of payment received from the new partner
  • Total assets of the firm will be reduced to the extent of payment received from the new partner
  • Change in total assets of the firm will depend upon the new profit sharing ratio of the partners
Identity the item which does not include under Current Account transaction__________________.
  • Services
  • Non-monetary movement of gold
  • Unilateral transfer
  • Investment income
Which of the following refers to a situation in which the merger of companies results in over $$25$$% of the market in the hands of the merged companies?
  • 'Gateway' condition
  • Restrictive practice
  • 'Share of supply' test
  • 'Asset' test
Calculate the goodwill for 3 years of purchase on the average profit basis.
year
2014
2015
2016
2017
profit
50000
60000
80000
30000
  • $$Rs.140000$$
  • $$Rs.150000$$
  • $$Rs.165000$$
  • $$Rs.175000$$
Goodwill is a _______ asset but not fictitious asset.
  • Tangible
  • Intangible
  • Personal
  • Nominal
a) Dog - Goodwill Fugitive good will
b) Cat -  Good willLocality good will
c) Rat - Good will   Personal good will
  • $$1, 2, 3$$
  • $$3, 2, 1$$
  • $$2, 1, 3$$
  • $$1, 3, 2$$
$$A$$ and $$B$$ are partners sharing profits in the ratio of $$3 : 2$$. $$C$$ is admitted for $$1/4th$$ share of profits and brings $$Rs. 10,000$$ as his capital. But he is not able to bring in cash for his share of goodwill $$Rs. 3,000$$. How will you treat this?
  • Goodwill is raised by $$Rs. 12,000$$
  • $$C$$ will remain as debtor for $$Rs. 3,000$$
  • $$C's$$ A/c is debited for $$Rs. 3,000$$
  • Goodwill is raised by $$Rs. 9,000$$
During the reconstitution of partnership firm, _________ is valued.
  • Expenses
  • Incomes
  • Assets
  • Goodwill
Which of the following is the method for valuation for Goodwill?
  • Average profit method.
  • Super profit method.
  • Capitalisation method.
  • All of the above.
_______ is an intangible asset which arises on acquisition or is internally generated.
  • Copyrights
  • Goodwill
  • Trademarks
  • Patent
Under which of the following methods of capitalization Goodwill = Capitalised Value of Firm(avg profit) - NET Assets(capital employed).
  • Capitalisation of Super Profits Method
  • Capitalisation of NRR
  • Capitalisation of normal Profits Method
  • Capitalisation of Average Profits Method
Under ___________ method Goodwill is valued at the agreed number of years purchase of the average profits of the past few years.
  • Average Profit Method
  • Super Profit Method
  • Capitalization Method
  • None of Above
If, average profit during last few years is $$Rs.100000$$, NRR is $$10$$%. Ascertain the value of goodwill by capitalisation of average profit method if total assets are $$Rs.1500000$$ and liabilities $$Rs.680000$$.
  • $$Rs.1,00,000$$
  • $$Rs.1,80,000$$
  • $$Rs.1,10,000$$
  • $$Rs.1,05,000$$
Which of the following factors affect the goodwill of a firm ___________.
  • nature of business
  • location of business
  • efficiency of management
  • all of the above
________ is the difference between actual profit and normal profit.
  • Super profit
  • Hyper profit
  • NRR
  • IRR
Average profit method is based on the assumption that _____________.
  • no change in the overall situation of profits is expected in the future
  • the overall situation of profits is expected to be increasing in the future
  • the overall situation of profits is expected to be decreasing in the future
  • None of the Above
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