CBSE Questions for Class 12 Commerce Accountancy Reconstitution Of A Partnership Firm - Admission Of A Partner Quiz 6 - MCQExams.com

Which of the following statement is true?
  • Balance in share forfeited A/c is transferred to goodwill A/c
  • Shares of private company are not freely transferrable
  • Shares cannot be issued at a premium more than $$20\%$$
  • Debentures cannot be issued at discount
At the time of admission or retirement of a partner which of the following account is opened to give effect to revaluation of assets and liabilities
  • Profit and loss appropriation A/c
  • Profit and loss adjustment A/c
  • Revaluation A/c
  • Realization A/c
When goodwill account is subsequently written off after admission of a new partner the capital A/c of all the partners is debited in
  • Old profit sharing ratio
  • New profit sharing ratio
  • Sacrificing ratio
  • Equally
As per the Partnership Act partners are entitled to share profit
  • Equally
  • In the ratio of capital
  • According to seniority
  • According to requirement of each partner
Excell Associates is a partnership firm, it intends to revalue its goodwill, average profits for the past five years are Rs 25000 p.a. Goodwill is being valued 3 years purchase of average profit. Goodwill of the firm will be valued at Rs 
  • Rs 90,000
  • Rs 75000
  • Rs 80000
  • Rs 60000
Reconstitution of a firm is warranted when there is......
  • Death of any partner
  • Retirement of any partner
  • Admission of any partner
  • All the three
A,B and C are three partner sharing profit and loss in the ratio of 2:3:1, B retires from the firm. hat is the new profit sharing ratio of the remaining partners
  • 1:3
  • 2:3
  • 2:1
  • 1:2
Which of these powers are not available to the State Government under the Indian Partnership Act?
  • To expel the partner from the firm
  • Prescribe maximum fee payable on registration of the firm
  • Makes rules to carry on provisions relating to registration
  • Conditions for inspection and grant of copies
Who brings in Goodwill at the time of admission of a new partner in a firm
  • New partner
  • All the old partners
  • Senior partner
  • Junior partner
There are three partners in a firm A, B  and C. D is admitted into the firm with 1/3 share of profit with a guaranteed profit of Rs. 60,000 p.a. The firm's total profit is Rs. 1,50,What amount would be given to D as his share of profit by the firm.
  • Rs. 40,000
  • Rs. 60,000
  • Rs. 45,000
  • Rs. 50,000
A, B and C are three partners in a firm sharing profit and loss in the ratio of $$3:2:1$$. They agree to admit D into the firm. A, B and C are prepared to give $$1/3$$rd, $$1/6$$th and $$1/9$$th share of their profit to D. The share of profit of D will be ___________.
  • $$1/10$$th
  • $$13/54$$
  • $$12/54$$
  • $$10/55$$
Goodwill brought in by the incoming partner is shared by the old partners in _________
  • Old ratio
  • New ratio
  • Sacrificing ratio
  • Gaining ratio
Premium method of valuation of goodwill is used when the _________
  • Incoming partner brings in his share of goodwill in cash
  • Incoming partner pays goodwill to the old partners privately
  • When goodwill brought in by the incoming partner is withdrawn by the old partners
  • When the partners decides to raise the goodwill at its full value.
Which of these can be described as the sum of those intangible attributes or benefits enjoyed by the enterprise which contributes to its success.
  • Research and Development
  • Goodwill
  • Deferred revenue expenditure
  • Intangible Assets
Goodwill is______________.
  • an intangible but fictitious asset
  • an intangible asset
  • a fictitious asset
  • a tangible and real asset
Sacrificing ratio is used at the time of .. of a partner for distribution of goodwill
  • Retirement
  • Death
  • Admission
  • Expulsion
Who is paid goodwill at the time of retirement of any partner, if goodwill a/c is not raised
  • All the partners
  • Retiring partners
  • Senior partner
  • Junior partner
Amount spent on acquiring goodwill is a ____________.
  • Revenue expenditure
  • Capital expenditure
  • Deferred Revenue expenditure
  • Loss
Which of these is not a method of treatment of goodwill?
  • Sinking fund method
  • Revaluation method
  • Premium method
  • Memorandum revaluation method
AB are two partners. C is admitted for $$1/3rd$$ share of profit. At the time of his admission the partners decides to revalue the assets and liabilities as under; Stock up by Rs.$$5,000$$, sundry creditors reduced by Rs.$$3,000$$, Provisions for doubtful debts increased by Rs.$$2,000$$, Building up by Rs.$$1,000$$. What is the profit or loss on revaluation of assets and liabilities.
  • Rs.$$6,000$$
  • Rs.$$7,000$$
  • Rs.$$8,000$$
  • Rs.$$5,000$$
AB are two partners sharing profit and loss equally. C is admitted as a third partner for $$1/3$$rd share of profit for which he brings in Rs. $$5,000$$ as his share of goodwill. Find the goodwill of the entire firm.
  • Rs. $$15,000$$
  • Rs. $$5,000$$
  • Rs. $$10,000$$
  • Nil
Premium method of goodwill valuation is generally followed in the event of
  • Retirement of a partner
  • Death of a partner
  • Admission of a partner
  • Dissolution of the firm
Decrease in value of assets at the lime of admission of a partner is
  • Credited to revaluation A/c
  • Debited to revaluation A/c
  • Credited to partners capital A/c
  • Debited to profit and loss A/c
When duration of the partnership is not fixed and there is no provision is made as to whom and how the partnership will comes to an end is called....
  • Partnership at will
  • Particular partnership
  • Sub-partnership
  • Fixed partnership
X paid Rs. 60,000 as goodwill to the firm at the time of his admission in the firm for 15 years. The firm is dissolved after 5 years due to the reasons other than the misconduct by X. C claim refund of goodwill X is entitled to refund of goodwill to the extent of
  • Rs. 20,000
  • Rs. 40,000
  • Rs. 50,000
  • Rs. 15,000
Unrecorded liability paid at the time of dissolution of a firm is debited to which of these accounts.
  • Partners capital a/c
  • Realization a/c
  • Revaluation a/c
  • Goodwill a/c
A and B are two partners sharing profit and loss in the ratio of $$2:3$$.C is admitted as a third partner for which he brings Rs. $$6,000$$ in cash as his share of goodwill, the partners decided to share profit and loss in the ratio of $$4:6:6$$ in future. Find the sacrificing ratio.
  • $$1:2$$
  • $$2:1$$
  • $$2:3$$
  • $$3:2$$
New incoming partner pays his share of goodwill in cash and profit sharing ratio of old partner is changed, Goodwill be distributed among old partners ____________.
  • At their old profit ratio
  • According to new ratio
  • According to sacrifice ratio
  • None of the above
Which of these terms are not associated with Joint Venture Accounting?
  • Co-venturer A/c
  • Memorandum Joint venture
  • Joint Bank A/c
  • Del credere commission
A and B share profits and losses equally. They admit C as an equal partner and goodwill was valued as Rs.30,C is to bring in 30,000 as his capital and necessary cash towards his share of Goodwill. What will be the final effect of goodwill in the partners capital account?
  • A and B accounts credited with 5,000 each.
  • All partners accounts credited with 10,000 each.
  • Only C's account credited with 10,000 as cash bought in for goodwill.
  • Final effect will be nil in each partner.
A balance sheet is prepared after the new partnership agreement, assets and liabilities are usually shown at _________. 
  • Original Value
  • Revalued Figure
  • At realisable value
  • At current cost
In normal trading business, which of the following would not be found in a partner's current account?
  • Interest on drawings
  • Goodwill
  • Amount drawn
  • All the above
Which of these would reduce the net profit of a partnership firm
  • Charging interest on drawing of the partners
  • Allowing interest on capital of the partners
  • Distribution of goodwill
  • Changing profit sharing ratio
At the time of retirement of a partner full goodwill is credited to the accounts of ________.
  • all partners
  • only retiring partner
  • only remaining partner
  • none of the above
A new partner may be admitted to partnership _____________________.
  • with the consent of all the old partners
  • with the consent of any one partner
  • with the consent of two-thirds of the old partners
  • with the consent of three-fourths of the old partners
Towards goodwill a new partner at the time of admission contributes _________________.
  • in cash
  • does not pay cash
  • may or may not pay cash for goodwill
  • none of these
At the time when a new partner enters, goodwill _________.
  • belongs to all partners, new and old
  • belongs only to the new partner who is going to be admitted
  • belongs only to the old partner who have credited it
  • none of the above
X and Y are partners sharing profits in the ratio of 3 :They admit Z as a partner who paid $$Rs.40,000$$ as Goodwill, the new profit sharing ratio being 2: 1: 1 among X, Y and Z respectively. The amount of goodwill will be credited to __________.
  • X and Y as $$Rs.30,000$$ and $$Rs.10,000$$ respectively
  • X only
  • Y only
  • None of the above
X and Y are partners sharing profit in the ratio of 1:They admit Z for 1/5th share who contributed 25,000 for his share of goodwill. The total value of the goodwill of the firm will be:
  • 25,000
  • 50,000
  • 1,00,000
  • 1,25,000
When Life Policies are taken severally for each partner, the amount received on death of a partner would be the firm's profit. It is also necessary to credit Partner's Capital account with _______ of the policy on the lives of the remaining partners.
  • Policy Value
  • Lump-sum Value
  • Surrender Value
  • Actual Value

A and B are partners sharing the profit in the ratio of 3 :They take C as the new partner who brings in 50,000 against capital and 20,000 against goodwill. New profit sharing ratio is 1: 1: 1 . In what ratio will this amount of goodwill be shared among the old partners ?
  • 16,000: 4,000. 
  • 10,000: 10,000. 
  • Old partners will not get any share in the goodwill brought in by C.
  • 12000: 8000. 
A and B were partners in a joint venture sharing profits and losses in the ratio of 4:A supplies goods to the value ofRs. 55,000 and incurs expenses amounting to Rs.B supplies goods to the value of Rs. 14,000 and his expenses amount to Rs.B sells goods on behalf of the joint venture and realizes Rs. 92,B is entitled to a commission of 5 per cent on sales. B settles his account by bank draft. What will be the final remittance ?
  • B will remit Rs. 69,560 to A
  • A will remit Rs. 69,560 to B
  • A will remit Rs. 69,000 to B
  • B will remit Rs. 69,000 to A
A and B are partners in a business sharing profits in the ratio of 5 :They admit C as a partner with 1/4 share in the profits which he acquires 3/4 from A and 1/4 from B. He pays 4,000 as his share of Goodwill A and B will be credited by:
  • 2,500 and 1,500 respectively
  • 2,000 each
  • 1,000 and 3,000 respectively
  • 3,000 and 1,000 respectively
Goodwill is a/an __________.
  • contingent asset
  • tangible asset
  • intangible asset
  • current asset
R admitted as a new partner for one-fourth share of future profits, fails to bring in cash of 5,000 towards goodwill but the existing (old) partners S and T, sharing profits in the ratio of 3 : 2, raise the goodwill account at its full value. Therefore the partners will be credited for goodwill as:
  • S - 3000, T - 2000, R - Nil
  • S - 9000, T - 6000, R - 5000
  • S - 12000, T - 8000, R - Nil
  • S - 2250, T - 1500, R - 1250
Goodwill of a firm of A and B is valued at 30,It is appearing in the books at 12,C is admitted for 1/4 share. What amount he is supposed to bring for goodwill?
  • 3,000
  • 4,500
  • 7,500
  • 10,500
A, B and C are the partners in a business firm sharing their profits in the ratio of 4 : 3 :A new partner D enters the firm. The new profit sharing of A, B, C and D is 5 : 4 : 2:D contributes a goodwill of $$Rs.36,000$$. This goodwill is to be allocated among A, B and C. Which one of the following will be the correct allocation?
  • A - $$Rs.16,000$$, B - $$Rs.12,000$$, C - $$Rs.8,000$$
  • A - $$Rs.12,000$$, B - $$Rs.8,000$$, C - $$Rs.16,000$$
  • A - $$Rs.12,000$$, B - Nil, C - $$Rs.24,000$$
  • A - $$Rs.24,000$$, B - Nil, C - $$Rs.12,000$$
Goodwill brought in by incoming partner in cash is taken away by the old partners in ___________.
  • Old Profit Sharing Ratio
  • New Profit Sharing Ratio
  • Sacrificing Ratio
  • Capital Ratio
A, B and C are equal partners. D is admitted to the firm for one-fourth share. D brings Rs. $$20,000$$ as capital and Rs. $$5,000$$ being half of the premium for goodwill. The value of goodwill of the firm is _____________.
  • $$Rs.10,000$$
  • $$Rs.40,000$$
  • $$Rs.20,000$$
  • None of these
Under average profit basis goodwill is calculated using following formula:
  • Average profits * no. of years of purchase.
  • Super profits * years of purchase.
  • Total of the discounted value of expected future profits.
  • Super profit divided with expected rate of return.
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