CBSE Questions for Class 12 Commerce Accountancy Reconstitution Of A Partnership Firm - Admission Of A Partner Quiz 7 - MCQExams.com

A and B are partners with capitals of Rs. $$10,000$$ and Rs. $$20,000$$ respectively and sharing profits equally. They admitted C as their third partner with one-fourth profits of the firm on the payment of Rs. $$12,000$$. The amount of hidden goodwill is __________.
  • $$Rs.6,000$$
  • $$Rs.10,000$$
  • $$Rs.8,000$$
  • None of these
Under annuity basis goodwill is calculated by using ___________.
  • Average profits * years of purchase
  • Super profits * years of purchase
  • Total of the discounted value of expected future benefits
  • Super profit divided with expected rate of retwun
What balance does a Partner's Current Account has?
  • Debit balance
  • Credit balance
  • Either Debit or Credit
  • None of these
A and B were partners in a joint venture Sharing profits and losses in the ratio of 3:A supplies goods to the value of Rs. 65,000 and incurs expenses amounting Rs. 1,B supplies goods to the value of Rs. 18,000 and his expenses amount to Rs. 1,B Sells goods on behalf of the joint venture and realizes Rs. 1,20,B entitled to commission of 5% on sales. B settles his account by bank draft. How much amount, B will pay to A as final settlement ?
  • Rs. 83,400
  • Rs. 93,200
  • Rs. 80,000
  • None of these
P and Q are partners sharing profits in the ratio of $$2:1$$. R is admitted to the partnership with effect from $$1^{st}$$ April on the term that he will bring Rs. $$20,000$$ as his capital for $$1/4^{th}$$ share and pays Rs. $$9,000$$ for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any)?
  • $$3,000:1,500$$
  • $$6,000:3,000$$
  • $$1400:3100$$
  • None of these
Under capitalization basis goodwill is calculated by using __________.
  • Average profits * no. of years of purchase
  • Super profits * years of purchase
  • Total of the discounted vale of expected benefits
  • Super profit divided with expected rate of return
In the case of downward revaluation of an asset, which is for the first time revalued, ___________ account is debited.
  • Fixed Asset
  • Revaluation Reserve
  • Profit & Loss account
  • General Reserve
Weighted average method of calculating goodwill is used when __________.
  • Profits are not equal
  • Profits has increasing trend
  • Profits has decreasing trend
  • Either b or c
A and B are partners with the capital Rs.50,000 and Rs.40,000 respectively.They share profits and losses equally. C is admitted on bringing Rs.50,000 as capital only and nothing was brought against goodwill. Goodwill in Balance sheet of Rs.10,000 is revalued as 30,000.What will be value of goodwill in the books after the admission of C?
  • $$Rs.60,000$$
  • $$Rs.30,000$$
  • $$Rs.20,000$$
  • $$Rs.15,000$$
A, B and C were partners sharing profits and losses in the ratio of 3 :2 :A retired and Goodwill of the firm is to be valued at Rs. 48,000 and Goodwill Account is to be raised which is not appearing in the balance sheet. What will be the treatment for Goodwill?
  • Credited to Revaluation Account at Rs 48,000
  • Credited to partners capital account Rs. 48,000 in profit sharing ratio
  • Only A's capital account credited with Rs. 24,000
  • Only A's capital account credited with Rs. 48,000
A and B are partners sharing the profit in the ratio $$3:2$$. They take C as the new partner, who is supposed to bring Rs. $$25,000$$ against capital and Rs. $$10,000$$ against goodwill. New profit sharing ratio is $$1:1:1$$. C is able to bring Rs. $$30,000$$ only. How this will be treated in the books of the firm?
  • C's capital account will be credited by $$Rs. 30000$$ and then, debited with $$Rs. 10,000$$ for goodwill adjustment.
  • C's capital account will be credited by $$Rs. 20000$$ and the balance $$Rs. 10,000$$ will be treated as premium for goodwill.
  • C's capital account will be credited by $$Rs. 25000$$ and the balance $$Rs. 5,000$$ will be treated as premium for goodwill.
  • None of these.
A, B and C are partners sharing profits and losses in the ratio of $$3:2:1$$. C retires on a decided date and Goodwill of the firm is to be valued at Rs. $$1,20,000$$. Find the amount payable to retiring partner on account of goodwill? 
  • Rs. $$60,000$$
  • Rs. $$40,000$$
  • Rs. $$20,000$$
  • Rs. $$12,000$$
R, J and D are the partners, sharing profits in the ration 7 : 5 :D died on 30th JuneIt was decided to value the goodwill on the basis of three years purchase of last five years average profits. It the profits are 29,600; 28,700; 28,900; 24,000 and 26,800, what will be D's share of goodwill?
  • $$Rs.20,700$$
  • $$Rs.27,600$$
  • $$Rs.82,800$$
  • $$Rs.27,000$$
The following trading results are available in respect of the business carried on by a firm:
2001                 Loss                    Rs.10,000
2002                 Loss                    Rs.5,000
2003                 Profit                  Rs.80,000
2004                 Profit                  Rs.55,000
The value of goodwill on the basis of 5 years' purchase of average profit of the business will be ___________.
  • $$Rs.1,25,000$$
  • $$Rs.1,50,000$$
  • $$Rs.1,00,000$$
  • $$Rs.1,20,000$$
If, at the time of admission, some profit and loss account balance appears in the books, it will be transferred to _______________.
  • Profit and Loss Adjustment Account
  • All partners' Capital Account
  • Old partner's Capital Account
  • Revaluation Account
When a new partner brings his share of goodwill in cash, the amount is debited to:
  • Goodwill A/c
  • Capital A/c of the new partner
  • Cash A/c
  • Capital A/cs of the old partners
X and Y share profits and losses in the ratio of 2:They take Z as a partner and the new profit sharing ratio becomes 3 : 2:Z brings Rs. 9,000 as a premium for goodwill.The full value of goodwill will be ________. 
  • $$Rs.9,000$$
  • $$Rs.36,000$$
  • $$Rs.54,000$$
  • $$Rs.48,000$$
Goodwill of a firm of A and B is valued at 30,It is appearing in the books at 12,C is admitted for 1/4th share. The amount of goodwill, which he is supposed to bring, will be:
  • 4,500
  • 3,000
  • 7,500
  • 10,500
The profits for the last three years are: 2002-03 Rs 42,500; 2003-04 Profits Rs 56,000 and 2004-05 Profits Rs 68,The total liabilities of the firm are Rs 10,00,000 of which outsiders' liabilities Rs 5,00,The rate of interest expected from capital invested is 10%. Calculate the value of goodwill on capitalisation basis taking weighted average of Net Profit.
  • Rs 97,000
  • Rs 97,250
  • Rs 97,500
  • Rs 97,750
On the admission of a partner if goodwill account is to be raised, this should be debited to_________. 
  • partner's capital account
  • goodwill account
  • cash account
  •  profit and loss adjustment account
When a goodwill account is raised at the time of admission of a new partner, credit is given to old partners in their__________. 
  • new profit sharing ratio
  • old profit sharing ratio
  • ratio of sacrifice
  • capital ratio
The capital of B and D are! 90,000 and! 30,000 respectively with the profit sharing ratio 3 :They decide to change the ratio to 5 :On the date of change Goodwill is valued at! 84,B and Ds capital will be credited by _________.
  • $$63,000$$ and $$21,000$$
  • $$50,000$$ and $$34,000$$
  • $$52,500$$ and $$31,500$$
  • $$60,000$$ and $$24,000$$
A and B are partners sharing the profit in the ratio of 3 : 2 they take C as the new partner, who brings in 25,000 against capital and 10,000 against goodwill. New profit sharing ratio is 1 : 1 :In what ratio will this amount be shared among the old partners A and B?
  • $$8,000 : 2,000$$
  • $$5,000 : 5,000$$
  • Old partners will not get any share in the goodwill bought in by C.
  • $$6,000 : 4,000$$
Which of the following statements is true?
  • In case of separate sets of books method of Joint Venture, co-venturers contribution of goods is debited in Joint Bank Account
  • Co-venturers contribution in cash is debited in Venturers personal account
  • Discount on discounting of BIR is debited to Venturers personal account
  • Contract money received is credited to Joint Venture account.
Suresh consigned 2,000 pieces of goods to his agent costing 30 each an invoice price of 20% over cost price. 4/5th of the goods were sold by Agent at a profit margin of 25% on his cost. Sale value of goods will be _________.
  • $$Rs.90,000$$
  • $$Rs.60,000$$
  • $$Rs.72,000$$
  • $$Rs.75,000$$
In the absence of any agreement, it is presumed that the new partner acquires his share in profits from the old partners in the:
  • New ratio
  • Old ratio
  • Sacrificing ratio
  • Gaining ratio
Firm has earned exceptionally high profits from a contract which will not be renewed. In such a case, the profit from this contract will not be included in:
  • Profit share of the partners
  • Calculation of the goodwill
  • Both (a) and (b)
  • None of these
X and Y are partners sharing profits in the ratio of $$1 : 1$$. They admit Z for $$1/5^{th}$$ share who contributed $$Rs. 50,000$$ for his share of goodwill. The total value of the goodwill of the firm will be ________. 
  • $$Rs. 50,000$$
  • $$Rs. 1,00,000$$
  • $$Rs. 2,00,000$$
  • $$Rs. 2,50,000$$
All accumulated profits and losses are written off among all partners in the___________. 
  • new profit-sharing ratio
  • old profit-sharing ratio
  • sacrificing ratio
  • gaining ratio
Share of goodwill brought in cash by the new partner is shared by the old partners _________. 
  • equally
  • in the sacrificing ratio
  • in the new ratio
  • in the gaining ratio
Super profit is __________. 
  • the average profit earned by the firm
  • the normal profit
  • the difference between average profit and normal profit
  • all of the above
R admitted as a new partner for one-fourth share of future profits, fails to bring in cash of $$Rs. 20,000$$ towards goodwill, but the existing (old) partners S and T, sharing profits in the ratio of $$3 : 2$$, raised the goodwill account at its full value. Therefore, the partners will be credited for goodwill as _________. 
  • $$S (Rs.) = 12,000, T(Rs.) = 8,000, R(Rs.) = Nil$$
  • $$S (Rs.) = 36,000, T(Rs.) = 24,000, R(Rs.) = 20,000$$
  • $$S (Rs.) = 48,000, T(Rs.) = 32,000, R(Rs.) = Nil$$
  • $$S (Rs.) = 9,000, T(Rs.) = 6,000, R(Rs.) = 5,000$$
Goodwill arises because __________.
  • the firm is able to earn more than the normal return on the capital invested
  • the firm is quite odd in the industry
  • the firm is the market leader in terms of turnover
  • the investment made by the firm is quite large
When an incoming partner purchases his share from one of the existing partners: 
  • The total assets of the firm do not change
  • The assets of the firm will be augmented to the extent of the payment received from the new partner
  • The total assets of the firm will be reduced if the existing partner withdraw the share surrendered
  • The changes in the total assets of the firm will depend upon the structure of the assets
A, B, C and D are partners in a firm, sharing profits in the ratio of $$2 : 1 : 2 : 1$$. On the retirement of C the Goodwill was valued at $$Rs, 72,000$$. A, B and D decided to share future profits equally. The necessary journal entry without opening goodwill account will be:
  • A's cap. A/c Dr. $$Rs. 8,000$$

    B's cap. A/c Dr. $$Rs. 8,000$$

    D's cap. A/c Dr. $$Rs. 8,000$$

    To C's cap. A/c $$Rs. 24,000$$
  • A's cap. A/c Dr. $$12,000$$

    B's cap. A/c Dr. $$Rs. 12,000$$

    To C's cap. A/c $$Rs. 12,000$$

    To D's cap. A/c $$Rs. 12,000$$
  • B's cap. A/c Dr. $$12,000$$

    D's cap. A/c Dr. $$12,000$$

    To C's cap. A/c $$24,000$$
  • B's cap. A/c Dr. $$24,000$$

    To C's cap. A/c $$24,000$$
When a new partner does not being goodwill in cash and goodwill A/c is raised in the book at fun value, it is distributed amongest old partners in the ___________. 
  • Equal ratio
  • Sacrificing ratio
  • Old profit sharing ratio
  • New profit sharing ratio
A and B are equal partners in a firm. They admitted C as one-sixth partner who brought in  Rs.1,20,000Rs.1,20,000 is to be paid to the old partners as per profit sacrificing ratio, B will receive __________. 
  • $$Rs. 60,000$$
  • $$Rs. 1,20,000$$
  • $$Rs. 90,000$$
  • Nil
Which of the following factor generally contribute to the value of goodwill of a firm?
  • Efficiency of business.
  • Risk involved in the business.
  • Location of the business.
  • All of above.
Find the goodwill of the firm using capitalisation, method from the following information:
Total Capital Employed in the firm Rs.8,00,000;
Reasonable Rate of Return 15%;
Profits for the year Rs. 12,00,000.
  • $$Rs.82,00,000$$
  • $$Rs.12,00,000$$
  • $$Rs.72,00,000$$
  • $$Rs.42,00,000$$
A, B & C are partners sharing profits and losses in the ratio of 3:2:C retires on a decided date and Goodwill of the firm is to be valued at Rs. 60,Find the amount payable to retiring partner on account of goodwill.
  • Rs. 30,000
  • Rs. 20,000
  • Rs. 10,000
  • Rs. 60,000
An increase in the value of fixed asset is referred to as _________.
  • depreciation
  • appreciation
  • market capitalization
  • reverse depreciation
It is supposed that on $$31-12-2015$$, the sundry debtors are amounted to Rs. $$40,000$$. On the basis of past experience, it is estimated that $$5\%$$ of the sundry debtors are doubtful. Also suppose that during the year $$2014$$ actual bad debts were Rs. $$1,600$$. What entry will be passed to create provision for doubtful debts?
  • Profit & Loss a/c Rs. $$2,000$$(Dr.) & Provision for doubtful debts A/c Rs. $$2,000$$(Cr.)
  • Provision for doubtful debts A/c Rs. $$2,000$$(Dr.) & Profit & Loss A/c Rs. $$2,000$$(Cr.)
  • Provision for doubtful debts A/c Rs. $$1,600$$ (Dr.) & Profit & Loss A/c Rs. $$1,600$$(Cr.)
  • Profit & Loss A/c Rs. $$1,600$$(Dr.) & Provision for doubtful debts A/c Rs. $$1,600$$(Cr.)
On the admission of a partner, goodwill is raised for $$Rs. 45,000$$. This amount is debited to __________. 
  • capital accounts of partners
  • goodwill account
  • cash account
  • none of these
The executors of the deceased partner are entitled to a share of profit earned by the firm from the date of last balance sheet and to the date of death. Which of the entry will be passed for this purpose? (Name of the deceased partner was Mr.X)
  • Profit & Loss Suspense A/c Dr
    To X A/c
  • X A/c Dr
    To Profit & Loss A/c
  • X A/c Dr
    To Memorandum Revaluation A/c
  • X A/c Dr
    To Profit & Loss Suspense A/c
Which of the following assets is compulsory to revalue at the time of admission of a new partner?
  • Stock. 
  • Fixed Assets. 
  • Investment. 
  • Goodwill. 
Goodwill of a firm of partners A and B is valued at $$Rs, 50,000$$. A and B share profits in the ratio of $$3 : 1$$ and C is admitted for $$1/5^{th}$$ share. If C does not bring goodwill in cash and also goodwill account is not to be raised, what adjustment entry should be passed?
  • A's capital A/c Dr.                     $$37,500$$
    B's Capital A/c Dr.                     $$12,500$$
                      To C's capital A/c                    $$50,000$$
  • C's Capital A/c Dr.                       $$10,000$$
                        To A's capital A/c                     $$7,500$$
                        To B's capital A/c                     $$2,500$$
  • C's Capital A/c Dr.                       $$50,000$$
                        To A's capital A/c                      $$37,500$$
                        To B's capital A/c                     $$12,500$$
  • A's Capital A/c Dr.                        $$7,500$$
    B's capital A/c Dr.                         $$2,500$$
                        To C's capital A/c                      $$10,000$$
Weighted average method of calculating goodwill should be followed when ___________.
  • Profits are uneven
  • Profits has increasing trend
  • Profits has decreasing trend
  • Either (B) or (C)
If goodwill is to be created and then immediately written off, the correct method of entering this in the accounts would be _________________.
  • Debit-Capital A/c (Old Ratio), Credit-Current A/c (New Ratio)
  • Debit-Capital A/c (Gaining Ratio), Credit-Capital A/c (Sacrificing Ratio)
  • Debit-Capital A/c (Sacrificing Ratio), Credit-Capital A/c (Gaining Ratio)
  • Debit-Capital A/c (New Ratio), Credit-Capital A/c (Old Ratio)
In which of the following case 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 partner
  • All of above
Under average profit basis goodwill is calculated by :
  • No. of years purchased multiplied with average profits
  • No. of years purchased multiplied with super profits
  • Summation of the discounted value of expected future benefits
  • Super profit divided with expected rate of return
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