CBSE Class 12 Accountancy Admission of a Partner Assignment

MCQ Questions for NCERT Class 12 Accountancy Reconstitution of Partnership Firm – Admission of a Partner  

Question: The balance in the investment fluctuation fund after meeting the fall in book value of investment, at the time of admission of partner will be transferred to:
(a) Revaluation account
(b) Capital accounts of old partners
(c) General reserve
(d) Capital account of all partners

Answer: B

Question: Revaluation account is a :
(a) Real account
(b) Nominal account
(c) Personal account
(d) None of the above 

Answer: B

Question: If the new partner brings any additional cash other than his capital contributions then it is termed as:
(a) Capital
(b) Reserves
(c) Profits
(d) Premium for goodwill 

Answer: D

Question: When new partner brings cash for goodwill, the amount is credited to:
(a) Realization account
(b) Cash account
(c) Premium for goodwill account
(d) Revaluation account

Answer:  C

Question: If the new partner brings his share of goodwill in cash, it will be shared by old partners in:
(a) Sacrificing ratio
(b) Old profit sharing ratio
(c) New ratio
(d) Capital ratio 

Answer:  A

Question: Goodwill of the firm is valued at Rs..100000. Goodwill also appears in the books at Rs.50000. C is admitted for ¼ share. The amount of goodwill to be brought in by C will be:
(a) Rs.20000
(b) Rs.25000
(c) Rs.30000
(d) Rs.40000 

Answer:  B

Question: A and B are partners sharing profits in the ratio of 3:2. They admit C for ¼ Rs.30000 for his share of goodwill. The total value of the goodwill of the firm will be:
(a) Rs.150000
(b) Rs.120000
(c) Rs.100000
(d) Rs.160000 

Answer:  B

Question: A and B are partners sharing profits and losses in the ratio of 3:2. C is admitted for 1/5 share in profits which he gets from A. New profit sharing ratio will be:
(a) 12:8:5
(b) 8:12:5
(c) 2:2:1
(d) 2:2:2

Answer: C 

Question: Ajay and Vijay are partners sharing profits in the ratio of 2:1. Ajay’s son Anil was admitted for ¼ share of which 1/8 was gifted by Ajay to his son. The remaining was contributed by Vijay. Goodwill of the firm is valued at Rs..40,000. How much of the goodwill will be credited to each of old partners’ capital account:
(a) Rs.2500
(b) Rs.5000
(c) Rs.20000
(d) None of the above

Answer: B

Question: The credit balance of profits and loss account appears in the books at the time of admission of partner will be transferred to:
(a) Profit and loss Appropriation account
(b) All partners’ capital account
(c) Old partners’ capital account
(d) Revaluation account

Answer:  C

Question: On the admission of a new partner, increase in the value of assets is debited to :
(a) Profit and loss adjustment account
(b) Assets account
(c) Old partners’ capital account
(d) None of the above 

Answer: B

Question: Yash and Manan are partners sharing profits in the ratio of2:1. They admit Kushagra into partnership for 25% share of profit. Kushagra acquired the share from old partners in the ratio of 3:2. The new profit sharing ratio will be:
(a) 14:31:15
(b) 3:2:1
(c) 31:14:15
(d) 2:3:1

Answer:C

Question: Which of the following is not the reconstitution of partnership?
(a) Admission of a partner
(b) Dissolution of Partnership
(c) Change in Profit Sharing Ratio
(d) Retirement of a partner

Answer: B

Question: On the admission of a new partner:
(a) Old partnership is dissolved
(b) Both old partnership and firm are dissolved
(c) Old firm is dissolved
(d) None of the above

Answer: A

Question: Sacrificing ratio is used to distribute ____________ in case of admission of a partner.
(a) Goodwill
(b) Revaluation Profit or Loss
(c) Profit and Loss Account (Credit Balance)
(d) Both b and c

Answer: A

Question: At the time of admission of a partner, undistributed profits appearing in the balance sheet of the old firm is transferred to the capital accounts of :
(a) Old partners in old profit sharing ratio
(b) Old partners in new profit sharing ratio
(c) All the partner in the new profit sharing ratio
(d) None of the above 

Answer: B

Question: Himanshu and Naman share profits & losses equally. Their capitals were Rs..1,20,000 and Rs.80,000 respectively. There was also a balance of Rs.60,000 in General reserve and revaluation gain amounted to Rs.15,000. They admit friend Ashish with 1/5 share. Ashish brings Rs.90,000 as capital. Calculate the amount of goodwill of the firm.
a. Rs.1,00,000
b. Rs. 85,000
c. Rs.20,000
d. None of the above 

Answer:  B

Question: A and B are partners sharing profit and losses in ratio of 5:3. C is admitted for 1/4th share. On the date of reconstitution, the debtors stood at Rs. 40,000, bill receivable stood at Rs.10,000 and the provision for doubtful debts appeared at Rs.4000. A bill receivable, of Rs. 10,000 which was discounted from the bank, earlier has been reported to be dishonored. The firm has sold, the debtor so arising to a debt collection agency at a loss of 40%. If bad debts now have arisen for Rs. 6,000 and firm decides to maintain provisions at same rate as before then amount of Provision to be debited to Revaluation Account would be:
(a) Rs. 4,400
(b) Rs.4,000
(c) Rs. 3,400
(d) None of the above 

Answer: C

Question: Which of the following is not true with respect to Admission of a partner?
(a) A new partner can be admitted if it is agreed in the partnership deed.
(b) If all the partners agree, a new partner can be admitted.
(c) A new partner has to bring relatively higher capital as compared to the existing partners
(d) A new partner gets right in the assets of the firm 

Answer: C

True/ False:

Question: “As per Section 26 of the Indian Partnership Act, 1932, a person can be admitted as a new partner if it is agreed in the Partnership Deed”.
Answer: False

Question:“Unless agreed otherwise, Sacrificing Ratio of the old partners will be the same as their Old Profit Sharing Ratio”.
Answer: True

Question: “A newly admitted partner cannot pay his share of the goodwill to the sacrificing partners privately”.
Answer:False

Question: “At the time of admission, old partnership comes to an end”. 
Answer: True

Question: New partner may or may not contribute capital at the time of admission.
Answer:True

Question: The goodwill brought at the time of admission of partner will be distributed among all the partners in new profit sharing ratio.
Answer: False

Question: New partner may bring his share of goodwill premium in kind.
Answer:True

Question: In the case of admission of a partner, all existing partners sacrifice.
Answer: False

Question: At the time of admission of partner, the partnership firm is dissolved.
Answer:False

Question: Increase in provision for doubtful debts will credited to revaluation account.
Answer:  False

Fill in the blanks

Question: Vinay and Naman are partners sharing profit in the ratio of 4:1. Their capitals were Rs..90000 and Rs.70000 respectively. They admitted Pratik for 1/3 share in the profits. Pratik brings Rs.100000 as his capital. The value of firm’s goodwill be……
Answer: Rs.40000……..

Question: Goodwill appearing in the books oat the time of admission of a new partner is written off by debiting …………..and crediting ………….
Answer: Old partners’ capital accounts, goodwill account

Question: When the value of goodwill of the firm is not given but has to be inferred on the basis of net worth of the firm, it is called…………….
Answer:  Hidden goodwill

Question: On the admission of a new partner, after revaluation has been done, the value of assets and liabilities appear in the books of the firm at………….
Answer: 4. their current value

Question: General reserve account indicates ………..and shows ………..balance.
Answer: Accumulated profits, credit

Question: Debit balance in the profit and loss account indicates…………….
Answer: Accumulated loss

Question: Gain or loss arising from revaluation is shared by ………..partners in …………ratio.
Answer: Old partners, old profit sharing ratio

Question: A and B are partners sharing profits equally. They admit C for 1/3 share in profits. A debtor whose dues of Rs.5000 were written off as bad debts, paid Rs.4000 in full settlement.
Bad debts recovered Rs.4000 will be debited to …………and credited to ……………
Answer: Cash account, revaluation account