Reconstitution Of A Partnership Firm Admission Of A Partner(12th Grade > Accountancy ) Questions and Answers

Question 1.


A and B are partners sharing profits and losses in the ratio of 3:2. They admit C into the partnership for one-fourth share of the profits while A and B as between themselves sharing profits and losses equally. The new profit sharing ratio (NR) between A, B and C will be:


  1.     3:2:2
  2.     3:3:2
  3.     4:2:2
  4.     None of these
Explanation:-
Answer: Option B. -> 3:3:2
:
B

C's share =1/4=2/8


Balance share= 1-1/4=3/4


Balance share to be shared equally. 


A's share = 3/4*1/2=3/8


B's share= 3/4*1/2 =3/8


New Profit sharing ratio of A,B & C = 3:3:2


 


Question 2.


If the value of assets is increased, the gain will be _______ to the revaluation account


  1.     Credited
  2.     No change
  3.     Debited
  4.     None of these
Explanation:-
Answer: Option A. -> Credited
:
A

If the value of assets is increased, the gain will be credited to the revaluation account


Question 3.


X&Y are partners sharing the profits in the ratio of 3:2. They admit Z who takes 2/7 from X and 1/7 from Y. The new profit sharing ratio will be:


  1.     9:11:15
  2.     11:9:15
  3.     15:11:9
  4.     15:9:11
Explanation:-
Answer: Option B. -> 11:9:15
:
B

New share of X= 3/5-2/7=11/35


New share of Y=2/5-1/7=9/35


Z's share = 2/7+1/7=3/7=15/35


New ratio= 11:9:15


Question 4.


Under which method, goodwill is calculated by dividing super profits with normal rate of return


  1.     Capitalisation method
  2.     Weighted profits method
  3.     Average profits method
  4.     Super profits method
Explanation:-
Answer: Option A. -> Capitalisation method
:
A

Capitalisation method = Super Profits / Normal Rate of Return


Question 5.


Which of the following is not a method for valuation of goodwill?


  1.     Capitalisation method
  2.     Realisation method
  3.     Super profit method
  4.     Average profit method
Explanation:-
Answer: Option B. -> Realisation method
:
B

Realisation method is not a method for valuation of goodwill


Question 6.


Revaluation A/c is debited :


  1.     To transfer loss on revaluation
  2.     For decrease in the amount of creditors
  3.     For an increase in the value of land and building
  4.     For an increase in provision for doubtful debts
Explanation:-
Answer: Option D. -> For an increase in provision for doubtful debts
:
D

Revaluation A/c is debited for an increase in provision for doubtful debts


Question 7.


Accumulated profits and reserves are distributed to partners in their ___


  1.     Sacrificing Ratio
  2.     New Profit Sharing Ratio
  3.     Old Profit Sharing Ratio
  4.     Gaining Ratio
Explanation:-
Answer: Option C. -> Old Profit Sharing Ratio
:
C

Accumulated profits and reserves are distributed to partners in their old profit sharing ratio.


Question 8.


General Reserve is distributed among partners in the ____________ ratio.


  1.     None of these
  2.     Equal
  3.     New
  4.     Old
Explanation:-
Answer: Option D. -> Old
:
D

General Reserve is distributed among partners in the old ratio.


Question 9.


Profit/loss on revaluation of assets is shared by the old partners in their :


  1.     old profit sharing ratio
  2.     sacrificing ratio
  3.     new profit sharing ratio
  4.     capital ratio
Explanation:-
Answer: Option A. -> old profit sharing ratio
:
A

Profit/loss on revaluation of assets is shared by the old partners in their old profit sharing ratio.


Question 10.


In case of revaluation account is prepared, the assets & liabilities appear in the books of the reconstituted firm at their:


  1.     realisable figures
  2.     revalued figures
  3.     market values
  4.     old book values
Explanation:-
Answer: Option B. -> revalued figures
:
B

In case of revaluation account is prepared, the assets & liabilities appear in the books of the reconstituted firm at their revalued figures.


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