Multiple Choice Questions (MCQs) Select the correct alternative: 1, New partner may be admitted to partnership @® with the consent of majority of the partners. ® with the consent of 3/4th of the old partners. © with the consent of all the old partners. © with the consent of 2/3rd of the old partners. 2. When a new partner is admitted in the firm, © old partners gain in profit-sharing ratio. } © only one partner gains while others loose. © ald partners loose i profit-sharing ry, @ Not affected at all. 3. Sacrificing Ratio is @ Old Profit-sharing Ratio - New Profit-sharing Ratio. © New Profit-sharing Ratio - Old Profit-sharing Ratio. © Equal to Old Profit-sharing Ratio. @® Equal to New Profit-sharing Ratio. 4. The account which shows change in the value of assets and liabilities is known as @® Profit and Loss Account. © Profit and Loss Appropriation Account, © Current Account. @ Revaluation Account. 5. General Reserve at the time of admission of a partner is transferred to @ Revaluation Account. ® the credit of Old Partners’ Capital Accour © the debit of Old Partners’ Capital Accounts. @ the credit of Capital Accounts of all the Pais 6. Accumulated Profits/Losses are transferred to the Capital Accounts of old partners in @ New profit-sharing ratio. ® Old profit-sharing ratio. © Capital Ratio. @ None of these, 7. The asset that normally is valued/revalued at the time of admission of a new partner is @® Goodwill. ® Fixed Assets. © Stock. © Investments. 8. In the Balance Sheet prepared after the new partnership agreement, Assets and Liabilities re shown at @® Original Value. ® Revalued Value or Amount, © Realisable Value. @ Current Cost. }, X and ¥ are sharing profits and losses in the ratio of 3 : 2. They admit Z as a partner and te 2/10th share in the profits. The new profit-sharing ratio will be ®©3: @2:Multiple Choice Questions McQs7 10. Shivand Mohan are sharing profits and losses in 3/10th share of the profits. He takes this share a¢ New profit-sharing ratio will be the ratio of 5: 3. They admit Jia as a partner and give her V/5th from Shiv and 1/10th from Mohan. @ 5:6:3. aa © wes ® . @ 18:24:38. in (Profit it 11. Gain (Profit) or Loss on revaluation of assets and reassessment of liabilities is transferred to Partners’ Capital ‘Accounts in their ® Capital Ratio. © Equal Ratio. © Old Profit-sharing Ratio, © Gaining Ratio. 12, A firm has an unrecorded investment of € 10,000. Journal entry to record the unrecorded investment on admission of a partner will be: @ Revaluation A/c Dr. 210,000 To Unrecorded Investment A/c 10,000 ® Unrecorded investment A/c Dr, 10,000 To Revaluation A/c 710,000 © Partner's Capital A/c «Dr. 710,000 To Unrecorded Investment A/c 10,000 @ None of the above. 13. X,Y and Z who are sharing profits and losses in the ratio of 5: 3 : 2, decide to share future profits and losses in the ratio of 2:3: 5 wer. 1st April, 2021, after admission of A. An extract of the Balance Sheet as at 31st March, 2021 is as follows: Liabilities &__| Assets z Creditors 2,00,000 | Plant and Machinery 2,00,000 Less: Provision for Depreciation 10,000} —_1,90,000 (i) If Plant and Machinery is valued at € 1,71,000, the Journal entry will be: @ Revaluation A/c Dr. 19,000 To. Provision for Depreciation ‘on Plant and Machinery A/c % 19,000 ® Plant and Machinery A/c ooDte 19,000 To Revaluation A/c 19,000 © Revaluation A/c Dr. 719,000 To Plantand Machinery A/c 19,000 Provision for Depreciation ‘on Plant and Machinery A/c Dr. 19,000 To. Revaluation A/c 19,000 (il) if creditors of € 10,000 were not recorded and are now to be recorded, the Journal entry will be Revaluation A/c Dr. 10,000 To Creditors % 10,000 © Creditors A/c Dr. % 10,000 To Revaluation A/c 10,000 © Revaluation A/c Dr. %2,10,000 To Creditors A/c %2,10,000 it Alc Dr. %2,10,000 @ Creditors A/c aa To Revaluation A/cMCQ.58 ) 14, When a new partner is admitted, he Is entitled to.a share of Bienen a share of © Present profits. © Future profits, @ Reserve appearing in the Balance Sheet of the fm 15. Wt i hich of the following statement is incorrect in case of admission of a partner? @ Increase in the value of asset will increase capital, ® Increase in the value of asset will decrease capital © Increase in the value of liability will decrease capital @ Decrease in the value of liability will increase capital. Premium paid by a new partner in addition to the capital brought in, is meant for ® Creditors © Goodwill. @® Mortgage. © Loan. 17. Aditya and Shiv were partners in a firm with capitals of € 3,00,000 and ® 2,00,000, respectively. Hsing admitted as a new partner for 1/4th share in the profits of the firm. Naina brought & 1,20,000 forher shay goodwill premium and 2,40,000 for her capital. The amount of goodwill premium credited to Aditya wa, ® % 30,000. ‘ © ¥ 60,000. (CBSE ang 16. @® 740,000. © 72,000. 18. Unrecorded assets or liabilities are transferred to @® Partners’ Capital Accounts. © Profit and Loss Account. 19. Mand Nare partners in a firm sharing profits and losses in the ratio of 5:3. On 1st April, 2021, they adnz Ras a partner. The new profit-sharing ratio of M,N and R will be 7: 5:4. The sacrificing ratio of Mand Ns @ 5:3. ®3 © 3:2. @ 4:5. Niyati and Aisha were partners in a firm sharing profits and losses in the ratio of 4:3. They admitted fins a new partner. Niyati sacrificed 1/4th from her share and Aisha sacrificed 1/7th from her share in arouse @ 2 © 11728 © 10/49 @ 716 (CBSE 2026 1. Goodwill brought by the incoming partner is distributed among the old partners in their ® New profit-sharing ratio. © Revaluation Account. @ Partners’ Current Accounts. Bina. Bina’s share in the profits of the firm will be: @ Old profit-sharing ratio. © Sacrificing ratio. @ Gaining ratio. : . When goodwill existing in the books is written off at the time of admission of a partner, itis transfered! Partners’ Capital Accounts in their @® old profit-sharing ratio. @® New profit-sharing ratio. @® Gaining ratio. . path sha © Sacrificing ratio. they admit C as a partner for | A and B are partners sharing profits in the ratio of 2: sacrificing ratio of A and B will be @ 2:3. ®t: © 3:2 @ 2:1Multiple Choice Questions i MCQ59 4, When a new partner is admitted, the ty ie ree ac ol edribctan i Gediien to Dalance of General Reserve’ appearing in the falance Stinet at the @ Profit and Loss Appropriation Account © Gapital Accounts of Old Partners, @ Revaluation Account (412015 6 25. Anita and Babita were partners sharing profits and losses in the ratioof 4:1 share in the profits. Savita was unable recorded for premium for goodwill is @) Capital Accounts of all the partners. Savita was admnitted for 1/5th 1o bring her share of goodvaill premium in cash, The Journal entry as below: Date | Particulars tr] ony am Savita’s Current Ale T4000] To Anita's Capital Ave : 30 To Babita’s Capital A/c 16000 (Adjustment of goodwill premium on Savita’s Admission) The new profit-sharing ratio of Anita, Babita and Savita, will be @ 4:27:12, © 13:12:10. © arts. @ 5:3:2. (CBSE 2020) 26. Sunand Star were partners ina firm sharing profits in the ratio of 2: 1. Moon was admitted as 2 new partner in the firm. New profit-sharing ratio was 3: 3 : 2. Moon brought the following assets towards his share of goodwill and his capital: z Machinery 2,00,000 Furniture 1,20,000 Stock 80,000 Cash 50,000 Ifhis capital is considered as & 3,80,000, the goodwill of the firm will be: @® 770,000. ® % 280,000. © % 4,50,000. @ % 140,000. (CBSE 2020) 27. Mona and Tina were partners in a firm sharing profits in the ratio of 3 : 2. Naina was admitted with 1/6th share in the profits of the firm, At the time of admission, Workmen's Compensation Reserve appeared in the Balance Sheet of the firm at % 32,000. The claim on account of workmen's compensation was determined at ® 40,000. Excess of claim over the reserve will be @® Credited to Revaluation Account. © Debited to Revaluation Account. © Credited to old partner's Capital Account. @_Debited to old partner's Capital Account. (CBSE 2020) 28. Partner's Capital A/c is debited ® to record gain (profit) on revaluation. © to record the General Reserve. © to record loss on revaluation. @ to record the capital brought in. 29. Mita and Sumit are partners in a firm with capitals of % 6,00,000 and % 4,00,000 respectively, Keshav Was admitted as a new partner for 1/5th share in the profits of the firm. Keshav brought & 40,000 as his share of ‘doodwill premium and ® 3,00,000 of his capital, The amount of goodwill premium credited to Sumit will Be ® % 20,000. @® % 24,000. © 2 16,000. @ 2 40,000 (CBSE 2020)An Aid to Accountancy —CBSE MCQ.60 x tio of 3: 1. They admit Z as a partner who pays & 49, fits in the ra BO. X and ¥ are partners sharing Pr 1 among X, Y and Z. The amount of goodwill that wile as Goodwill. The new profit-sharing ratio is 2:1 credited to @ Xand ¥ as ¥ 30,000 and % 10,000. © Xonly. © Yonly. @ None of these. 31. Landi share profits of a business in the ratio of 5: 3. They admit Nas a partner in the firm for 1/4th share in the profits. For the purpose of admission of N, Goodwill of the firm is to be valued at 4 years’ purchase of the Average Super Profit of the last 3 years. Average Profit of the last 3 years is 20,000. Normal Prof is % 12,000. () The new profit-sharing ratio is @ 4:3:1 @ 3:3:2. © 15:9:8. @ 4:2:1. (ii) For adjustment of goodwill, the entry will be: @ NsCapital Ale Dr. 8,000 To L's Capital Alc 8,000 ® NsCapital Ale «Dr. % 8,000 To Us Capital A/c 5,000 To. Ms Capital A/c ©3000 © Nscapital Ave Dr. 6,000 To. UsCapital Alc % 3,000 To Ms Capital A/c % 3,000 @ NsCapitat Ac Or. % 8,000 To Us Capital A/c % 3,000 To. Ms Capital A/c % 5000 32, Increase in the value of liabilities at the time of admission of a partner is @ Debited to Revaluation Account ® Credited to Revaluation Account. © Credited to Partner's Capital Account. @ Debited to Partner's Capital Account. 33. For which of the following situations, old profit-sharing ratio of partners is used at the time of admission of a new partner? @ When new partner brings only a part of his share of goodwill, © When new partner is not able to bring his share of goodwill. © When, at the time of admission, goodwill already exists in the Balance Sheet. @ When new partner brings his share of goodwill in cash. (CBSE Sample Poper 2020 34, A,Band Care equal partners, Disadmitted asa partnerin the firm for 1/4th share. Dbrings 20,000252°™ and & 5,000 being half of the premium for goodwill. he value of goodwill of the firm is @® % 10,000. ® % 40,000. © % 20,000. * @ None of these. 35. Pand Qare partners in a firm having capitals of € 15,000 each. R is admitted as a partner for 1/374 for which he has to bring % 20,000 for his share of capital. The amount of goodwill will be ® *8,000. ® * 10,000. © %9,000. @ 11.000. shaItiple Choice Questi Multip ‘ions moa 36. When the new partner brings cash for goodwill, the amount is credited to @ Revaluation Account. ‘ ® Cash Account. © Premium for Goodwill Account. © Realisation Account. (CBSE Delhi 2015 Q. 37. X and Y are partners with capitals of Z 1 i ‘5. admit with Vth share in profits He brings € 14000 for ns coool Pome cn oe Len el baler a '4,000 for his capital. Profit and Loss A/c has a credit balance of 10,000 on thi ¢ 4 i i - “ on the date of admission of Z, Value of hidden goodwill at the time of Z's admission will be 16,000. ® & 25,000. © % 20,000. @© None of these. 38. Xand ¥ share profits and 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 % 9,000 @s premium for goodwill. The full value of goodwill will be @ 760.000 ® 236,000. © % 54,000. @® % 27,000. 39, Atthe time of admission, ifthe profit-sharing ratio among the old partners does not change then sacrificing ratio will be @® equal, ©® according to the contribution of capital. © their old profit-sharing ratio, @ according to new partner.