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CBSE Questions for Class 12 Commerce Accountancy Reconstitution Of A Partnership Firm - Retirement / Death Of A Partner Quiz 12 - MCQExams.com

X, Y, Z are equal partners in a firm. Z retires from the firm. The new profit sharing ratio between X and Y is 1:2. Find the gaining ratio.
  • 3:2
  • 2:1
  • 4:1
  • Only Y gains by 1/3
The balance of joint life policy account as shown in the balance sheet represent ___________.
  • the surrender value of a policy
  • annual premium of JLP
  • total premium paid by the firm
  • amount receivable on the maturity of the policy
Hari, Roy and Prasad are partners in the ratio of 3:5:1 respectively. Roy wants to retire. His share is being purchased by Prasad. What would be the new ratio of Hari and Prasad respectively?
  • 1:2
  • 2:1
  • 3:5
  • Equal
If vendors are issued fully paid shares of Rs 1,00,000 in consideration of net assets of Rs 80,000, the balance of Rs 20,000, will be debited to
  • Profit and Loss A/c
  • Goodwill A/c
  • Capital Reserve A/c
  • Capital A/c
Tick the correct answer.
______ is an intangible asset.
  • Goodwill
  • Stock
  • Building
  • Cash
X and Y shared profits and losses in the ratio of 3:2 with effect from 1stApril,2018 they agreed to share profits equally. The goodwill of the firm was valued at Rs.60,000. The necessary single adjustment entry will be :
  •  Dr. Y and Cr. X with Rs.6,000.
  •  Dr. X and Cr. Y with Rs.6,000.
  • Dr. X and Cr. with Rs.600.
  • Dr. Y and Cr. X with Rs.600.
When a new partner brings cash for goodwill, the amount is credited to the __________ .
  • Premium for Goodwill Account
  • Capital Account of the new partner
  • Cash Account
  • None of the above
When A and B, sharing profits and losses in the ratio of 3:2, admit C as a partner giving him 1/5th share of profits. This will given by A and B __________ .
  • Equally
  • In the ratio of their profits.
  • In the ratio of their capitals.
  • None of these
A and B sharing profits and losses in the ratio of 2/3rd and 1/3rd,admit C as a partner giving him 1/4th share. The new profit-sharing ratio will be :
  • A−1/2,     B−1/4,     C−1/4
  • A−1/3,     B−1/3,     C−1/4
  • A−3/8,     B−3/8,     C−2/8
  • None of these
According to Section 37 of the Indian Partnership Act, 1932, the interest payable to the representative of deceased partner on the amount left by him will be ______________ .
  • 6%p.a
  • 10%p.a
  • The Bank Rate
  • None of these
In the event of death of partner, the amount of General Reserve is transferred to partner's capital Accounts in ______________ .
  • The new profit-sharing ratio.
  • The old profit-sharing ratio.
  • The capital ratio.
  • None of these
Verma and Sharma are partners in a firm sharing profits and losses in the ratio of 5:3. They admitted Ghosh as a new partner for 1/5th share of profits. Ghosh is to bring in Rs.20,000 as capital and Rs.4,000 as his share of goodwill premium. Give the necessary Journal entries, when goodwill is paid privately.
  • Cash A/c             Dr.      4000
         To Goodwill A/c               4000
  • Goodwill A/c      Dr.       4000
          To Cash A/c                    4000
  • Goodwill  A/c             Dr.      4000
               To Verma's Caital A/c      2500
               To Sharma's Capital A/c  1500
  • No entry is required.
Deepak, Farukh and Lilly were partners in a firm sharing profits in the ratio of 3:2:1. On 28.2.2015 Farukh retired from the firm. On Farukh's retirement there was a balance of Rs12,000 in Workmen's Compensation Reserve which was no more required. On Farukh's retirement this amount will be:
  • Debited to the capital accounts of the partners in their profit sharing ratio.
  • Credited to the capital accounts of the partners in their profit sharing ratio.
  • Credited to the capital accounts of Deepak and Lilly in their profit sharing ratio.
  • Credited to the capital account of Farukh.
Goodwill means ____________.
  • good name or reputation of the business
  • it is an intangible real asset
  • the capacity of a business to earn profits in future
  • All the Above
Gaining ratio is equal to _________.
  • New ratio − Old ratio
  • New ratio + Old ratio
  • New ratio × Old ratio
  • New ratio + Sacrificing ratio
The formula of capitalisation method is ___________.
  • Profit(adjusted)100
  • Total ProfitAdjusted Profit
  • Adjusted ProfitTotal Profit×100
  • Profit(Adjusted)Normal rate of Return×100
According to the value of goodwill, the type of customers may be divided into ________________.
  • Cats, dogs and mice
  • Cats and mice
  • Dogs and mice
  • Dogs and horses
Under the memorandum revaluation method ___________.
  • the new partner does not bring cash for his share of goodwill
  • the new partner brings cash for his share of goodwill
  • goodwill is raised in the books, and then is immediately written off
  • None of the Above
A admitted as a new partner for 1/ 4 share of future profits, fails to bring in cash of Rs. 5,000 towards goodwill but the existing (old) partners B and C sharing profits in the ratio of 3 : 2 raise goodwill account at its full value. Therefore, partners will be credited for goodwill as:
  • B = Rs. 3,000, C = Rs. 2,000, A = Nil
  • B = Rs. 9,000, C = Rs. 6,000, A = Rs. 5,000
  • B = Rs. 12,000, C = Rs. 8,000, A = Nil
  • B = Rs. 2,250, C = Rs. 1,500, A = Rs. 1,250
The ratio at which the continuing partners take up the retiring partner's share is _________.
  • gaining ratio
  • sacrificing ratio
  • profit sharing ratio
  • loss sharing ratio
A and B are partners sharing profits in the ratio of 7:C is admitted for 3/7 share in the profits, the new profit sharing ratio among the partners will be ____________________.
  • A : B : C :: 14 : 6 : 15
  • A : B : C :: 7 : 6 : 7
  • A : B : C :: 7 : 3 : 3
  • A : B : C :: 5 : 3 : 3
Ram and Shyam are partners in a firm with capital of Rs 4,80,000 and Rs 3,10,000, respectively. They admitted Ganesh as a partner with l/4th share of profit. Ganesh brings Rs 3,00,000 as his capital. Ganesh's share of goodwill will be __________.
  • Rs.1,10,000
  • Rs.27,500
  • Rs.17,500
  • Rs.70,000
Capital employed in a business is Rs. 1,50,Profits are Rs. 50,000 and the normal rate of profit is 20%. The amount of goodwill as per Capitalisation Method would be:
  • Rs. 1,00,000
  • Rs. 1,50,000
  • Rs. 2,00,000
  • Rs. 3,00,000
___________ method is followed when the new partner does not bring in his share of goodwill in cash. 
  • Premium
  • Revaluation
  • Reconstruction
  • Both a and b
An example of an intangible asset is:
  • Goodwill
  • Debit balance of Profit and Loss Account
  • Preliminary expenses
  • Deferred revenue expenditure
The need for valuation of goodwill arises at the time of _______ of a business.
  • purchase
  • sale
  • agreement
  • closure
If the business is centrally located or is at a place having heavy customer traffic, then the goodwill tends to be ______.
  • low
  • high
  • same
  • medium
The important methods of valuation of goodwill are:
  • Average Profits Method
  • Super Profits Method
  • Capitalisation Method
  • All  of the above
Under super 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
Under average profit basis, goodwill is calculated by: 
  • No. of years purchased multiplied with past average profits
  • No. of years purchased multiplied with past super profits
  • Summation of the discounted value of expected future benefits
  • Super profit divided with expected rate of return
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