CBSE Questions for Class 12 Commerce Accountancy Reconstitution Of A Partnership Firm - Retirement / Death Of A Partner Quiz 5 - MCQExams.com

A third party with whom a partner has agreed to share the profit accruing to him from a partnership is known as _________.
  • Partner in profits
  • Dormant partner
  • Nominal partner
  • Sub- partner
A, B and C are sharing profit and loss in the ratio of 3:2:1, D is admitted into the firm with 1/7th share of profit which he purchases from A.How the goodwill brought in by D would be distributed amongst the old partners on the facts given in question?
  • 3:2:1
  • Equally
  • In capital ratio
  • Only A would get goodwill
If the average profit is 15000 and normal profit is Rs.10,000 and goodwill is to be valued at 5 years purchase of super profit, what would be the goodwill of the firm
  • Rs.75,000
  • Rs.25,000
  • Rs.30,000
  • Rs.50,000
Premium method of goodwill is generally used at the time of _____ of  a partner.
  • retirement
  • expulsion
  • death
  • admission
A partner has a right to have access to all the books of accounts etc., of the firm ____________________.
  • during the subsistence of the partnership
  • during die proceedings for the dissolution of the firm
  • after the dissolution of the firm
  • all the above
A firm has a policy of valuing goodwill at 2 years purchase of average profit of last three years.From the following details estimate the goodwill of the firm
Profit for the year 2006 Rs.20,000 which includes an insurance claim of Rs.40,000 received
Loss for the year 2007 Rs.80,000 includes VRS payment of Rs.110,000
Profit for the year 2008 Rs. 105,000 which includes profit on sale of fixed assets Rs.25,000
  • Rs.60,000
  • Rs.90,000
  • Rs.75,000
  • Rs.80,000
Tick the correct statement
  • No public notice is required at the time of death of a partner
  • A firm is compulsory dissolved upon death of a partner
  • If no public notice is given estate of the deceased partner is liable for debts of the firm
  • A firm cannot carry on its business after the death of a partner
Calculate the value of goodwill of the firm under annuity method.
Super profit Rs. 10,000
No. of years over which super profit is to be paid =5 years.
Rate of annuity 5% per annum.
  • Rs. 40,000
  • Rs. 45,000
  • Rs. 43,300
  • Rs. 41,000
Match the following:
AB
1Goodwill1Non-depreciable
2Land2Non-cash expense

3Called up3Intangible
4Depreciation4Capital
  • (1, 4), (2,3), (3, 2), (4, 1)
  • (1, 2), (2,3), (3, 4), (4, 1)
  • (1, 4), (2, 2), (3,1), (4, 3)
  • (1,3), (2,1), (3,4), (4,2)
ABC Associates is a partnership firm, it intents to revalue its goodwill, average profit for the past five year are Rs.15,000 p.a, goodwill is being valued  3 years purchase of average profit. The goodwill  of the firm would be valued at 
  • Rs.15,000
  • Rs.45,000
  • Rs.20,000
  • Rs.7,500
ABC are three partners sharing profit and loss equally.The firm decides to give only 1/5th share of profit to C in future due to his illness. on the date of change in the profit sharing ratio the goodwill of the firm was valued Rs.What entry would be made to give effect to this change in the profit sharing ratio
  • A's Capital A/c Dr. Rs.2500, B's Capital A/c Dr. Rs.3500, C's Capital A/c Cr. Rs.6000
  • A's Capital A/c Dr. Rs.4000, B's Capital A/c Dr. Rs.2000, C's Capital A/c Cr. Rs.6000
  • A's Capital A/c Dr. Rs.3000, B's Capital A/c Dr. Rs.3000, C's Capital A/c Cr. Rs.6000
  • A's Capital A/c Dr. Rs.2000, B's Capital A/c Dr. Rs.4000, C's Capital A/c Cr. Rs.6000
Goodwill of the partnership business is the property of the _______.
  • Firm
  • Senior partner
  • Managing partner
  • none of these
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
In settling the accounts of the firm after dissolution, the goodwill of the firm can be sold ____________.
  • separately
  • along with other assets
  • Either (a) or (b)
  • cannot be sold
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
When the personal property of a partner is being used in the business of the firm, it ______.
  • is a question of fact to be determined with reference to the partner's intention whether it has become the property of the firm
  • becomes the joint estate
  • remains an estate of the partner
  • is a question of law to be decided on legal principles
The majority rule is applicable when the partners are divided over _______.
  • ordinary business matter
  • fundamental matter
  • legal issues
  • all the three
Goodwill brought in by the incoming partner is shared by the old partners in _________
  • Old ratio
  • New ratio
  • Sacrificing ratio
  • Gaining ratio
Which of the following is an example of real asset
  • Building A/c
  • Goodwill A/c
  • Patent A/c
  • Copyright A/c
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.
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
Goodwill is______________.
  • an intangible but fictitious asset
  • an intangible asset
  • a fictitious asset
  • a tangible and real asset
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
Death of a partner has the effect of _________.
  • dissolution of the firm
  • continuance of the business of the firm
  • his legal heir joining the firm
  • shutting down the business for $$15$$ days
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
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
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
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
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.
  • $$1:2$$
  • $$2:1$$
  • $$2:3$$
  • $$3:2$$
0:0:1


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