Multiple Choice Questions (MCQs)
Select the correct alternative:
1. X and Y are sharing profits and losses in the ratio of 3 : 2. They admit Z as a partner and give him 2/10th share in the profits. The new profit-sharing ratio will be
(a) 12:8:5
(b) 3:2:2
(c) 3:2:5.
(d) 2:1:2.
Ans . a
2. Shiv and Mohan are sharing profits and losses in the ratio of 5:3. They admit Jea as a partner and give him 3/10th share of the profits. This share he will get 1/5th from Shiv and 1/10th from Mohan.
The new profit-sharing ratio will be
(a) 5:6:3
(b) 2:4:6.
(c) 17:11:12.
(d) 18:24:38.
Ans. c
3. Profit or Loss on revaluation of assets and reassessment of liabilities is transferred to Partners' Capital Accounts in their
(a) Capital Ratio
(b) Equal Ratio.
(c) Old Profit-sharing Ratio.
(d) Gaining Ratio.
Ans. c
4. Aditya and Shiv were partners in a firm with capitals of ₹ 3,00,000 and ₹ 2,00,000, respectively. Naina was admitted as a new partner 1/4th share in the profits of the firm. Naina brought ₹ 1,20,000 for her
share of goodwill premium and ₹2,40,000 for her capital. The amount of goodwill premium credited toAditya will be
(a) 40,000.
(b) * 30,000.
(c) 72,000
(d) * 60,000.
Ans . d
5. Unrecorded assets or liabilities are transferred to
(a) Partners' Capital Accounts.
(b) Revaluation Account.
(c) Profit and Loss Account.
(d) Partners' Current Accounts.
Ans . b
6. X and Y are partners sharing profits in the ratio of 3:2, and capitals as ₹ 100,000 and 50,000 respectively.
Z is admitted for 1/5th share in profits. The amount Z will contribute as capital will be
(a) 50,000.
(b) 35,000.
(c) 37,500
(d) 60,000.
Ans . c
7. X and Y are partners sharing profits and losses in the ratio of 3: 2. Z was admitted for the 1/5th share and for this he brings ₹150,000, as capital. If capitals are to be proportionate to profit-sharing ratio, the
respective capitals of the partners will be
(a) ₹3,00,000: ₹300,000 : ₹31,50,000.
(b) ₹3,60,000 : ₹ 2,40,000: ₹ 1,50,000.
(c) ₹1,50,000: ₹1,50,000: ₹1,50,000.
(d) ₹ 1,50,000 : ₹2,00,000 : ₹4,00,000.
Ans. b
8. Goodwill brought by the incoming partner is distributed among the old partners in their
(a) Old profit-sharing ratio.
(b) New profit-sharing ratio.
(c) Sacrificing ratio.
(d) Gaining ratio.
Ans . c
9. When goodwill existing in the books is written off at the time of admission of a partner, it is transferred to Partners' Capital Accounts in their
(a) Old profit-sharing ratio.
(b) New profit-sharing ratio,
(c) Sacrificing ratio.
(d) Gaining ratio.
Ans . a
10. A and B are partners sharing profits in the ratio of 2:3, they admit C as a partner for 1/4th share, the sacrificing ratio of A and B will be
(a) 2:3.
(b) 1:1.
(c) 3:2.
(d) 2:1.
Ans . a
11. When a new partner is admitted, the balance of General Reserve' appearing in the Balance Sheet at the time of admission is credited to
(a) Profit and Loss Appropriation Account.
(b) Capital Accounts of all the partners.
(c) Capital Accounts of Old Partners.
(d) Revaluation Account.
Ans. c
12. Increase in the value of liabilities at the time of admission of a partner is
(a) Debited to Revaluation Account.
(c) Credited to Partner's Capital Account.
(b) Credited to Revaluation Account.
(d) Debited to Partner's Capital Account.
Ans . a
13. For which of the following situations, old profit-sharing ratio of partners is used at the time of admissionof a new partner?
(a) When new partner brings only a part of his share of goodwill.
(b) When new partner is not able to bring his share of goodwill.
(c) When, at the time of admission, goodwill already exists in the Balance Sheet.
(d) When new partner brings his share of goodwill in cash.
Ans . c
14. A and B are partners in a firm having a capital of 7 54,000 and 36,000 respectively. They admitted for 1/3rd share in the profits. C brought proportionate amount of capital. The capital brought in by C would be
(b) 45,000.
(a) 90,000
(d) 3,600.
(c) 5,400.
Ans . b
15. P and Q are partners in a firm having capitals of 15,000 each. R is admitted for 1/3rd share for which he has to bring 20,000 for his share of capital. The amount of goodwill will be
(a) 8,000.
(b) 10,000.
(c) 9,000.
(d) 11,000.
Ans . b
16. When the new partner brings cash for goodwill, the amount is credited to
(a) Revaluation Account.
(b) Cash Account.
(c) Premium for Goodwill Account.
(d) Realisation Account.
Ans . c
17. New partner can be admitted into partnership
(a) with the consent of any one partner.
(b) with the consent of majority of partners.
(c) with the consent of all the partners.
(d) with the consent of 2/3rd of old partners.
Ans . c
19. X and Y are partners sharing profits in the ratio of 2: 1. They admit Z into the partnership for 1/4th share in profits for which he brings $ 20,000 as his share of capital. Hence, the adjusted capitals of X and Y will be
(b) 32,000 and 16,000 respectively.
(d) 20,000 and 40,000 respectively.
(a) 40,000 and 20,000 respectively.
(c) 60,000 and 30,000 respectively.
Ans . a
19. At the time of admission, if the profit-sharing ratio among the old partners does not change then sacrificing ratio will be
(a) equal.
(c) their old profit-sharing ratio.
(b) according to the contribution of capital.
(d) according to new partner.
Ans . c
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