CBSE Questions for Class 12 Commerce Accountancy Reconstitution Of A Partnership Firm - Retirement / Death Of A Partner Quiz 9 - MCQExams.com

A & B shares profit and losses equally. The admit C as an equal partner and assets were revalued as follow: Stock at Rs.$$20,000$$ (book value Rs.$$12,000$$); Machinery at Rs.$$60,000$$ (book value Rs.$$55,000$$). Find profit/loss on revaluation to be shared among A & B.
  • Profit $$6,500$$ & $$6,500$$
  • Profit $$4,000$$ & $$4,000$$
  • Profit $$2,500$$ & $$2,500$$
  • None of the above
X & Y share profits & losses in the ratio of $$2:1$$. They take Z as a partner and the new profit sharing ratio becomes $$3:2:1$$. Z brings Rs.$$4,500$$ as premium for goodwill. The full value of goodwill will be _____________.
  • $$Rs.24,000$$
  • $$Rs.27,000$$
  • $$Rs.18,000$$
  • $$Rs.4,500$$
Goodwill is a fictitious asset. 
  • True
  • False
A & B shares profit and losses equally. The admit C as an equal partner and assets were revalued as follow:Stock at Rs.$$10,000$$ (book value Rs.$$12,000$$); Machinery at Rs.$$50,000$$ (book value Rs.$$55,000$$): Building would be appreciated by $$10\%$$ (book value Rs.$$15,000$$). Find the profit/loss on revaluation to be shared among A and B.
  • Profit $$2,750$$ & $$2,750$$
  • Loss $$2,750$$ & $$2,750$$
  • Profit $$2,500$$ & $$2,750$$
  • None of the above
When a partner dies, the _________.
  • profit share of the deceased partner is divided amongst the remaining partner and the firm continues its business
  • deceased partners share is given to his legal representative
  • both (A) & (B)
  • none of the above
The correct equation for calculation of super profit method used for calculation of Goodwill is
  • Annual profit-fair returnof capitalemployed
  • Average annual profit -fair returnof capitalemployed
  • Average annual profit-current profit of the firm
  • None of the above
A,B & C are in partnership sharing profits and losses in the ratio $$2:2:1$$. They want to admit D into partnership with $$1/5$$ share. D brings in Rs.$$30,000$$ as capital and Rs.$$10,000$$ as premium for goodwill. If premium money is retained in business which of the following journal entry is correct for sharing premium for goodwill?

A Capital A/c      Dr.
B Capital A/c      Dr.
C Capital A/c      Dr.
   To Premium for Goodwill A/c		$$4,000$$
$$4,000$$
$$2,000$$




$$10,000$$
Premium for Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c
   To C Capital A/c		$$10,000$$




$$2,000$$
$$4,000$$
$$4,000$$
Premium for Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c
   To C Capital A/c		$$10,000$$




$$4,000$$
$$4,000$$
$$2,000$$
Premium for Goodwill A/c      Dr.
   To A Capital A/c
   To B Capital A/c
   To C Capital A/c 		$$10,000$$




$$3,000$$
$$3,000$$
$$4,000$$
  • A
  • B
  • C
  • D
A partnership contract was revised and due to this revision it was found that the distribution of profit amongst the partners is required to be changed after true closure of accounts. This will affect which account?
  • Commission payable account
  • Past adjustment of profit
  • Interest on capital
  • Interest on drawings
Goodwill should be tested for value impairment at which of the following levels?
  • Each identifiable long-term asset.
  • Each reporting unit.
  • Each acquisition unit.
  • Entire business as a whole.
A partner retires but the business is still being carried on __________.
  • Profit sharing between the remaining partners will remain same
  • Share proportion remains same
  • Share proportion changes
  • Both a & c
A partner retires but the business is still being carried on 
  • Profit sharing between the remaining partners will remain same
  • Share proportion remains same
  • Share proportion changes
  • Both a & c
The correct equation for calculation of super profit method used for calculation of Goodwill is
  • Annual profit-fair return of capital employed
  • Average annual profit - fair return of capital employed
  • Average annual profit- current profit of the firm
  • None of the above
Goodwill valuation is not required to be done in the following condition
  • Partnership business is being changed
  • Business is sold
  • At the time profit is being distributed among the partners at the end of financial year
  • All of the above
Sometimes, the partners of a firm decide to change their _________ profit sharing ratio without the admission or retirement of a partner.
  • old
  • new
  • existing
  • both a and b
On the admission of a new partner, it is believed that the assets have changed in value. To record a decrease in the value of an asset the double entry should be:
  • Asset A/c      Dr
         To Revaluation A/c
  • Profit and loss A/c    Dr
         To Asset A/c
  • Revaluation A/c        Dr
          To Profit and loss A/c     
  • Revaluation A/c        Dr
          To Asset A/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 (Old Ratio)

    Credit - Capital A/c (New ratio)
  • Debit - Current A/c (New Ratio)

    Credit - Current A/c (Old ratio)
  • Debit - Capital A/c (New Ratio)

    Credit - Capital A/c (Old ratio)
Choose the correct answers from the alternatives given.
The heir of the deceased partner _______. 
  • has a right to become a partner in the firm of the deceased partner
  • does not have a right to become a partner in the firm of the deceased partner
  • can become a partner in the firm of the deceased partner only if the surviving partners give their consent in this regard
  • both (b) & (C)
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
The amount that the incoming partner pays for goodwill is known as ____________.
  • adjusted goodwill
  • premium for capital
  • premium for goodwill
  • hidden goodwill
Which of the following asset is compulsory to revalue, at the time of admission of a new partner?
  • Stock.
  • Fixed Assets.
  • Investment.
  • Goodwill.
Choose the correct answers from the alternatives given.
In case of death of a partner ________. 
  • the firm is dissolved unless otherwise agreed
  • the estate of deceased partner is liable for any act of the firm after the date of his death if no public notice is given
  • both (A) & (B)
  • none of these
Which of the following formula is/are used for valuation of goodwill under super profit basis? 
  • Goodwill = Super profit x No. of years purchase.
  • Goodwill = Super profit x Annuity factor.
  • $$Goodwill = \frac{Super \ profit}{Capitalization \ rate} \times 100$$
  • Any of the above.
Weighted average method of calculating goodwill should be followed when -
  • Profits are uneven.
  • Profits have increasing trend.
  • Profits have decreasing trend.
  • Either (B) or (C).
Which of the following factors generally contribute to the value of goodwill of a firm?
  • Efficiency of management.
  • Risk involved in the business.
  • Location of the business.
  • All of above.
A, B & C are partners sharing profits and loss in the ratio 3:2:They decide to change their profit sharing ratio to 2:2:To give effect to this new profit sharing ratio, they decide to value the goodwill at Rs 30,Pass the necessary journal entry if Goodwill is not appearing in the old balance sheet and should not appear in the new balance sheet.
R & S are in partnership sharing profit and losses at the ratio 3:They take T as a new partner. Calculate the new profit sharing ratio. If T purchases 1/10th share from R.
  • 27:18:5
  • 28:17:5
  • 5:4:1
  • 19:19:12
A & B are equal partners.They admit C and D as partners with 1/5th and 1/6th share respectively. What is the profit sharing ratio of all the partners?
  • 27:18:3:6
  • 28:17:5:6
  • 5:4:5:6
  • 19:19:12:10
Profits & losses for the last years are:
2011-2012Losses Rs 10,000
2012-2013Losses Rs 2,500
2013-2014Profits Rs 98,000
2014-2015Profits Rs 76,000
The average capital employed in the business is Rs 2,00,The rate of interest expected from capital invested is $$12\%$$. Calculate the value of goodwill on the basis of four years' purchase of super-profits.
  • Rs 65,500
  • Rs 40,375
  • Rs 24,000
  • Rs 16,375
Average profit of a firm is $$Rs.1,20,000$$. The rate of capitalization is $$12%$$. Assets and liabilities of the firm are $$Rs.10,00,000$$ & $$Rs.4,25,000$$ respectively. The value of goodwill of the firm is _____________.
  • $$Rs.3,25,000$$
  • $$Rs.2,25,000$$
  • $$Rs.5,25,000$$
  • $$Rs.4,25,000$$
From the following information calculate the value of goodwill.
The adjusted maintainable profit is Rs 40,000, Capital employed is Rs 2,00,000, Normal rate of return is $$15\%$$, Capitalization rate is $$20\%$$.
  • Rs 50,000
  • Rs 75,000
  • Rs 40,000
  • Rs 60,000
0:0:1


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