Last Updated on: 5th July 2024, 01:43 pm
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Partnership Accounts – Admission of Partner MCQ
1. Increase in value of assets at the time of admission of a partner is
(a) Credited to revaluation A/c.
(b) Debited to revaluation A/c.
(c) Credited to partners capital A/c.
(d) Debited to profit and loss A/c.
Increase in value of assets at the time of admission of a partner is credited to revaluation A/c. So, option (a) is correct.
2. Decrease in value of liability at the time of admission of a partner is
(a) Credited to partners capital A/c.
(b) Debited to profit and loss A/c.
(c) Credited to revaluation A/c.
(d) Debited to revaluation A/c.
Decrease in value of liability at the time of admission of a partner is Credited to revaluation A/c. So, option (c) is correct.
3. A and B are sharing profits and losses in the ratio of 3:2. C is admitted with 1/5th share in profits of the firm which he gets from A. Find out the New profits sharing ratio.
(a) 12:8:5
(b) 8:12:5
(c) 2:2:1
(d) 2:2:2.
1/5 th share of C is taken from A. So, A’s share becomes 3/5 – 1/5 = 2/5. So, the new sharing ratio is 2/5:2/5:1/5= 2:2:1. So, option (c) is correct.
4. X and Y are partners sharing profits and losses in the ratio 3:2. X’s Capital is Rs.60, 000 and Y’s Capital is Rs.30, 000. They admit Z for 1/5th share of profits. How much Z should bring towards his capital?
(a) Rs.18,000
(b) Rs.24,000
(c) Rs.29,000
(d) Rs.22,500
The new profit sharing ratio becomes 12/25, 8/25, 1/5. So, the value of 12/25 + 8/25, i.e for 4/5 share, capital is 60000 + 30000 = 90,000. So, the capital of all partners should be 90000 / (5/4) = 1,12,500. So, for 1/5th share, Z should bring 1,12,500 – 90,000 = 22,500
So, option (d) is correct.
5. P and Q are partners sharing profits and losses in the ratio 5:3. On admission, R brings Rs.70, 000 cash and Rs.48, 000 against goodwill. New profit sharing ratio between P, Q, R is 7:5:4. The sacrificing ratio among P and Q is:
(a) 3:1
(b) 4:7
(c) 5:4
(d) 2:1
Sacrificing share of P = 5/8 – 7/16 = 3/16. Sacrificing share of Q = 3/8 – 5/16 = 1/16
The sacrificing ratio is 3:1. So, option (a) is correct.
6. A and B are partners sharing profits in the ratio of 7:3. C is admitted as a new partner. ‘A’ surrenders 1/7th of his share and ‘B’ surrenders 1/3rd of his share in favour of C. The new profit sharing ratio will be:
(a) 3:1:1
(b) 4:1:1
(c) 3;2:2
(d) None of the above.
A surrenders 7/10 x 1/7 = 1/10 th share. B surrenders 3/10 x 1/3 = 1/10th share.
A’s new share is 7/10 – 1/10 = 6/10 =3/5, B’s new share is 310 – 1/10 = 2/10=1/5
C’s share is 1/10 + 1/10 = 2/10=1/5. The new share is 3/5:1/5:1/5: or 3:1:1. So, option (a) is correct.
7. A, B, C are partners sharing profits in the ratio of 4:3:2. D is admitted for 2/9th share of profits and bring Rs.30, 000 as capital and Rs.10, 000 for his share of goodwill. The new profit sharing ratio between partners will be 3:2:2:2. Goodwill amount will be credited in the capital accounts of:
(a)-A only.
(b)-A, B and C (equally)
(c)-A and B (equally)
(d)-A and C (equally).
Goodwill amount will be shared by the old partners in sacrificing ratio.
Sacrificing ratio of A = 4/9 – 3/9 = 1/9, Sacrificing ratio of B = 3/9 – 2/9 = 1/9
Sacrificing ratio of C = 2/9 – 2/9 = 0, So, the goodwill amount will be shared equally between A & B. So, option (c) is correct.
8. A and B are partners of a firm sharing profits in the ratio of 3:2. C was admitted for 1/5th share of profit. Machinery would be appreciated by 10% (Book value of Rs.80, 000) and Building would be depreciated by 20% (Book Value Rs.2, 00,000). Unrecorded debtors of Rs.1, 250 would be bought to books and Creditors of Rs.2, 750 died and needn’t to pay anything. What will be the profit or loss on revaluation?
(a) Loss Rs.28,000
(b) Loss Rs.40,000
(c) Profit Rs.28,000
(d) Profit Rs.40,000.
Profit / loss on revaluation = 10 % of 80000 = 8000 (profit) +20 % of 2,00,000 = 40000 (loss) + 1250 (profit) + 2750 (profit) = 28000 (loss). So, option (a) is correct.
9. At the time of admission of a new partner, Goodwill raised should be written off in /1
(a) New Profit Sharing Ratio √
(b) Old Profit Sharing Ratio
(c) Sacrificing Ratio
(d) Gaining Ratio
At the time of admission of a new partner, Goodwill raised should be written off in New Profit Sharing Ratio. So, option (a) is correct.
10. When an incoming partner brings his share of goodwill in cash, it should be adjusted by crediting.
(a) Goodwill A/c
(b) His own Capital A/c
(c) Old Partner’s Capital A/c
(d) All Partner’s Capital A/c
When an incoming partner brings his share of goodwill in cash, it should be adjusted by crediting Old Partner’s Capital A/c. So, option (c) is correct.
11. When a new partner is admitted to partnership, the proportion in which existing partners surrender their share of profit is called :
(a) Valuation of goodwill
(b) Sacrificing ratio
(c) Capital ratio
(d) Gaining ratio.
When a new partner is admitted to partnership, the proportion in which existing partners surrender their share of profit is called Sacrificing Ratio. So, option (b) is correct.
12. The balance in Profit and Loss Adjustment Account on admission of partner is transferred to
(a) Old partners in old profit sharing ratio
(b) Old partners in new profit sharing ratio
(c) New partners in old profit sharing ratio
(d) New partners in new profit sharing ratio
The balance in Profit and Loss Adjustment Account on admission of partner is transferred to Old partners in old profit sharing ratio. So, option (a) is correct.
13. On the admission of a partner, decrease in the value of machinery is debited to the /1
(a) Machinery A/c
(b) Profit and Loss Adjustment A/c
(c) Old Partner’s Capital A/c
(d) None of the above.
On the admission of a partner, decrease in the value of machinery is debited to the Profit and Loss Adjustment A/c. So, option (b) is correct.
14. The sacrificing ratio is used at the time of
(a) Dissolution of firm
(b) Death of a partner
(c) Retirement of a partner
(d) Admission of a partner.
The sacrificing ratio is used at the time of Admission of a partner. So, option (d) is correct.
15. X and Y are partners sharing profits in the ratio of 1:3. A is admitted as a partner with 1/4th share in the profits. The new profit sharing ratio of X, Y and A will be
(a) 16:48:22
(b) 1:3:4
(c) 4:9:3
(d) 3:9: 4
The sacrificing share of X & Y on admission of A =¼ x ¼ = 1/16, B= 3/4x ¼ = 3/16
So, the new share of X = ¼ – 1/16 = 3/16, Y= ¾ – 3/16 = 9/16, A= ¼.
So, the new profit sharing ratio will be 3/16 : 9/16 : ¼ = 3:9:4. So, option (d) is correct.
16. A and B share profits in the ratio of 7:3. X is admitted as a new partner entitled to 3/7th share in the firm. X takes 1/7th share from A and 2/7th from B. The new ratio of A, B and X will be
(a) 7:3:3
(b) 4:2:3
(c) 10:7:5
(d) 39:19:30
New share of A = 7/10 – 1/7 = 39/70, New share of B = 3/10 – 2/7 = 19 / 70, Share of X = 3/7 = 30/70. Hence, the new sharing ratio = 39:19:30. So, option (d) is correct.
17. A and B are partners sharing profits in the ratio of 4:3. C joins as a partner, the new ratio among A, B and C being 7:4:3. What is the sacrificing ratio between A and B?
(a) Equal
(b) 4:3
(c) 2:1
(d) 1:2
Sacrificing share of A = 4/7 – 7/14 = 1/14, Sacrificing share of B = 3/7 – 4/14 = 2/14
So, the Sacrificing ratio of A:B is 1:2. So, option (d) is correct.
18. A and B were sharing profits in the ratio of 1:2. On admission of C as new partner, the new profit sharing ratio of A and B are 1/3rd and 1/4th respectively. Profit sharing ratio of C will be
(a) 2/7th
(b) 3/7th
(c) 5/12th
(d) 7/12th
Profit sharing ratio of C = 1- (1/3 + ¼) = 1- 7/12 = 5/12. So, option (c) is correct.
19. J and K are partners sharing profits and losses in the ratio of 5:3. C was admitted and agreed to give him 3/10 of the profit. What is the new ratio after C’s admission?
(a) 35.42.17
(b) 35:21:24
(c) 49:22:29
(d) 34:20:12
3/10 th share given to C. So, Remaining Share of J & K = 1- 3/10 = 7/10. After C’s admission:
A’s share : 7/10 x 5/8 = 35/ 80, B’s Share : 7/10 x 3/8 = 21/ 80, C’s share : 3/10 = 24/80
New Profit sharing ratio is A: B: C = 35/ 80 : 21/ 80 : 24/80, i.e. 35: 21: 24. So, option (b) is correct
20. J and K are partners sharing profits and losses in the ratio of 5:3. C was admitted and agreed to give him 3/10 of the profit. If C acquires 1/5th share from J and 1/10th from K, new profit sharing ratio will be:
(a) 5:6:3
(b) 2:4:6
(c) 18:24:38
(d) 17:11:12
New Profit sharing Ratio: J= 5/8 – 1/5 =17/40, K= 3/8 – 1/10 =11/40, C= 3/10 =12/40
New ratio will be 17:11:12. So, option (d) is correct.
21. C was admitted in a firm with 1/4th share of profits. C contributes Rs. 15,000 as his capital. J and K’s profit sharing ratio is 3:2. Find the required capital of J and K, taking C’s capital as base.
(a) Rs. 27,000 and Rs. 16,000 for J and K respectively.
(b) Rs. 27,000 and Rs. 18,000 for J and K respectively.
(c) Rs. 32,000 and Rs. 21,000 for J and K respectively.
(d) None of the above
C contributes 15,000 as capital for ¼th share. Therefore, total capital of the firm 15,000 x 4 = 60,000. Combined Capital of J & K = 60,000 – 15,000 = 45,000.
J’ s Capital= 45,000 x 3/5 = Rs. 27,000, K’ s Capital= 45,000 x 2/5 = Rs. 18,000
So, option (b) is correct.
22. J and K are partners sharing profit and losses in the ratio of 3:2. J’s capital is Rs. 30,000 and k’s Rs. 15,000. C was admitted and agreed to give 1/5th share of profits. How much C should bring towards his capital?
(a) Rs. 9,000
(b) Rs. 12,000
(c) Rs. 14,500
(d) Rs. 11,250
Remaining share after C’s share 1- 1/5 = 4/5th. Now 4/5th share = 45,000,
Total Capital= 45,000 x 5/4 = Rs. 56,250, So, C should bring 56,250 x 1/5 = Rs. 11,250, for his share of Capital. So, option (d) is correct.
23. A and B are partners sharing profit and Losses in the ratio of 3:1.They admit Z as a partner who pays Rs. 4,000 as goodwill. The new profit sharing ratio is 2:1:1 among A, B & Z . The amount of goodwill will be credited to
(a) A and B as Rs. 3,000 and Rs.1,000 respectively.
(b) Only A
(c) Only B
(d) None of the above.
Goodwill will be shared by old partners in sacrificing ratio. sacrificing share of A= ¾ – 2/4 = ¼ sacrificing share of B= ¼ – 14 = NIL. Goodwill amount will go only to A. So, option (b is correct.
