CBSE Class 12 Accountancy Dissolution Of Partnership Firm MCQs Set B

Question: When Retiring partners balance is treated as loan , in the absence of any information, he will get:

a) Interest only 6% per annum

b) Interest 7.5%

c) Interest 12%

d) None of the options

Answer: Interest only 6% per annum

Question: Deceased partners share of profit is to be transferred to his account by:

a) P/L Suspense A/c

b) P/L Adjustment A/c

c) P/L Appropriation A/c

d) Revaluation Account

Answer: P/L Suspense A/c

Question: Deceased partners share of profit is shown in:

a) Credit side of his capital account

b) Debit side of his capital account

c) Both

d) None of the options

Answer: Credit side of his capital account

Question: Calculation of sharing of profit up to date of death will be calculated on the basis of

a) Both Time basis and Turnover basis

b) Yearly basis

c) Monthly basis

d) None of the options

Answer: Both Time basis and Turnover basis

Question: When amount due to retiring partner is paid with interest, it will be paid through which account?

a) His Loan Account

b) His capital account

c) His Drawing account

d) None of the options

Answer: His Loan Account

Question: Partners Capital Account will be debited in case o

a) Loss on Revaluation

b) Profit on Revaluation

c) General Reserve

d) None of the options

Answer: Loss on Revaluation

Question: When a Partner dies, amount due to him will be paid to:

a) His Executor

b) Gainer partner

c) Remaining Partners

d) None of the options

Answer: His Executor

Question: Retiring partners share of goodwill is calculated as follows:

a) Value of firms goodwill x His Share of profit

b) Value of firms goodwill x Gainer partners share

c) Value of firms goodwill x All partners share

d) None of the options

Answer: Value of firms goodwill x His Share of profit

Question: Deceased partner share of profit can be calculated on the basis of

a) Time basis and Sale Basis

b) Sales basis

c) Time basis

d) None of the options

Answer: Time basis and Sale Basis

Question: The outgoing partners share in the profits may be adjusted through

a) Profit and Loss suspense account

b) Profit and Loss account

c) Profit and Loss Appropriation account

d) Revaluation Account

Answer: Profit and Loss suspense account 

Question: The continuing partners may agree on a specified new profit sharing ratio so in that case the specified ratio will be the:

a) New ratio

b) Old ratio

c) Sacrificing ratio

d) None of the options

Answer: New ratio

Question: Bad debts recovered will

a) Increase the Revaluation Profit

b) Decrease the Revaluation Profit

c) Both

d) None of the options

Answer: Increase the Revaluation Profit

Question: Reason for preparing Profit and Loss suspense Account is to

a) Adjust the profit of deceased partner

b) Adjust the Revaluation profit

c) Adjust the capital of deceased partner

d) Adjust the Revaluation loss

Answer: Adjust the profit of deceased partner

Question: What is the meaning of change in the profit sharing ratio:

a) Purchase of shares of profit by one partner form another partner

b) In which all partner including the new partner share future profit and loss

c) In which all partner including the retired partner share future profit and loss

d) None of the options

Answer: Purchase of shares of profit by one partner form another partner

Question: The circumstances when change in profit sharing ratio is needed:

a) Both

b) When existing partners decide

c) At the time of admission/retirement/death

d) None of the options

Answer: Both

Question: In case of change in profit sharing ratio among the existing partners who will compensate the existing partners:

a) Gaining partner shall compensate

b) Only one partner

c) Sacrificing partner shall compensate

d) None of the options

Answer: Gaining partner shall compensate

Question: ______ is a kind of reserve created for payment of compensation in case of accident.

a) Workmen compensation Reserve

b) Profit and loss compensation Reserve

c) Investment compensation Reserve

d) Investment compensation Reserve

Answer: Workmen compensation Reserve

Question: The decision in garner Vs Murray is exactly to section of the Indian partnership Act 1932

a) Section 48

b) Section 41

c) Section 37

d) None of the options

Answer: Section 48

Question: On dissolution of the firm , Cash balance is transferred to

a) Bank Account

b) Realisation Account

c) Partners capital A/c

d) None of the options

Answer: Bank Account

Question: On dissolution of the firm , all assets are transferred to realisation account at

a) Book Value

b) Market Value

c) Cost value

d) None of the options

Answer: Book Value

Question: What time would be taken into consideration if equal monthly amount is drawn as drawing at the beginning of each month

a) 6.5 Month

b) 5.5 Month

c) 6 month

d) None of the options

Answer: 6.5 Month

Question: What balance does a partners current account has

a) Both

b) Dr. Balance

c) Cr. Balance

d) None of the options

Answer: Both

Question: A draws 1000 Rs. Per month on the last day of every month. If the rate of interest is 5% P.A then the total interest on drawing will be

a) Rs. 275

b) Rs. 375

c) Rs. 300

d) Rs. 225

Answer: Rs. 275

Question: Why is Profit and Loss Adjustment Account prepared

a) To record those transaction and errors which were left while preparing the final accounts

b) To record those transaction which were left while preparing the revaluation A/c

c) To record those transaction which were left while preparing the Capital A/c

d) None of the options

Answer: To record those transaction and errors which were left while preparing the final accounts

Question: Give circumstances under which the fixed capitals of partners may change

a) Both

b) When fresh capital is introduced by the partner

c) When a part of capital is withdrawn by the partner

d) None of the options

Answer: Both

Question: In the absence of any information regarding the acquisition of share in profit of the retiring/deceased partner by the remaining partners, it is assumed that they acquire his/her share

a) Old profit sharing ratio

b) New profit sharing ratio

c) Gaining Ratio

d) None of the options

Answer: Old profit sharing ratio

Question: On retirement/death of a partner, the retiring/deceased partners capital account will be credited with

a) His/her share of goodwill

b) Goodwill of the firm

c) Shares of goodwill of remaining partners

d) None of the options

Answer: His/her share of goodwill

Question: Gobind, Hari and Pratap are partners. On retirement of Gobind, the goodwill already appears in the Balance Sheet at T 24,000. The goodwill will be written off

a) By debiting all partners capital accounts in their old profit sharing ratio

b) By debiting remaining partners capital accounts in their new profit sharing ratio

c) By debiting retiring partners capital accounts from his share of goodwill

d) None of the options

Answer: By debiting all partners capital accounts in their old profit sharing ratio

Question: Chaman, Raman and Suman are partners sharing profits in the ratio of 5:3:2. Raman retires, the new profit sharing ratio between Chaman and Suman will be 1:1. The goodwill of the firm is valued at Rs. 1,00,000 Ramans share of goodwill will be adjusted

a) By debiting only Sumans Capital Account with Rs. 30,000.

b) By debiting Chamans Capital account and Sumans Capital Account with Rs 15,000 each.

c) By debiting Chamans Capital account and Sumans Capital Account with Rs. 21,429 and 8,571 respectively.

d) None of the options

Answer: By debiting only Sumans Capital Account with Rs. 30,000.

Question: On retirement/death of a partner, the remaining partner(s) who have gained due to change in profit sharing ratio should compensate the

a) Remaining partners (who have sacrificed) as well as retiring partners.

b) Retiring partners only.

c) Remaining partners only (who have sacrificed).

d) None of the options

Answer:  Remaining partners (who have sacrificed) as well as retiring partners.

Question: _______ is prepared at the time of dissolution :

a) Revaluation Account

b) Profit & Loss Account

c) Profit and Loss Appropriation Account

d) Realisation Account

Answer: D

Question: While transferring assets to realisation account is omitted to be transferred:

a) Patents

b) Goodwill

c) Cash

d) Investments

Answer: C

Question: If total assets are Rs.2,00,000; total liabilities are Rs.40,000; amount realised on sale of assets is Rs. 1,75,000 and realisation expenses are Rs.3,000, the profit or loss on realisation will be :

a) Profit Rs. 12,000

b) Loss Rs.68,000

c) Loss Rs.28,000

d) Loss Rs.25,000

Answer: C

Question: In which condition a partnership firm is deemed to be dissolved?

a) On a partner’s admission

b) On retirement of a partner

c) On expiry of the period of partnership

d) On loss in partnership

Answer: C

Question: A partnership firm is compulsorily dissolved) :

a) When the business of the firm is declared illegal

b) When a partner of the firm dies

c) When a partner of the firm becomes insolvent

d) When a partner transfers his share to some other person without the consent of other partners

Answer: A

Question: At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :

a) Realisation Account

b) Creditor’s Account

c) Partner’s Capital Account

d) Profit & Loss Account

Answer: C

Question: On dissolution, goodwill account is transferred to) :

a) In the Capital Accounts of Partners

b) On the credit of Cash Account

c) On the Debit of Realisation Account

d) On the Credit of Realisation Account

Answer: C

Question: On dissolution, the balance of a partner’s capital account appearing on the assets side of a balance sheet is transferred to :

a) On the Debit of Realisation Account

b) On the Credit of Realisation Account

c) On the Debit of Partner’s Capital Account

d) On the Credit of Cash Account

Answer: C

Question: On dissolution, partner’s loan is transferred to :

a) Partner’s Capital Account

b) Realisation Account

c) Partner’s Loan Account

d) Revaluation Account

Answer: C

Question: Sundry Creditors amounted to Rs.8,000. These were paid at a discount of 5%.

Realisation account will be debited by

a) Rs.8,000

b) Rs.7,600

c) Rs.400

d) Rs. 8,400

Answer: B

Question: On dissolution of a firm, a partner took over Rs. 17,000 investments for Rs. 14,000. Which one of the following account will be debited/credited with how much amount?

a) Partner’s Capital Account Debit with Rs. 14,000

b) Partner’s Capital Account Credit with Rs. 17,000

c) Realisation Account Credit with Rs. 17,000

d) Realisation Account Credit with Rs.3,000

Answer: A

Question: On dissolution of firm, which item is debited to the realisation account?:

a) Realisation expenses paid by partner

b) Balance of reserve fund

c) Amount of unrecorded asset

d) Creditor’s balance shown in the Balance Sheet

Answer: A

Question: At the time of dissolution of a firm, Creditors are Rs. 70,000; Partners’ capital is Rs. 1,20,000; Cash Balance is Rs. 10,000. Other assets realised Rs. 1,50,000. Profit/Loss in the realisation account will be :

a) Rs.60,000 (Loss)

b) Rs.80,000 (Profit)

c) Rs.40,000 (Loss)

d) Rs.30,000 (Loss)

Answer: D

Question: On firm's Dissolution, Patents realised at Rs. 40,000. State which account will be credited.

a) Cash A/c

b) Realisation A/c

c) Profit and Loss A/c

d) Patents A/c

Answer: B

Question: At the time of dissolution^ partner gives his personal asset to firm's creditor in settlement, the account credited will be

a) Realisation A/c.

b) Partner's Capital A/c.

c) Cash A/c.

d) Creditor's A/c.

Answer: B

Question: On dissolution of a firm, an unrecorded furniture of Rs. 5,000 was taken by a partner for Rs. 4,300 against payment. Which Account will be credited and by how much amount?

a) Cash Account by Rs. 4,300.

b) Realisation Account by Rs.700.

c) Partner's Capital Account by Rs. 5,000.

d) Realisation Account by Rs. 4,300.

Answer: D

Question: A firm is dissolved, Param, a partner is to carry out dissolution for which he will get Rs. 5,000, including expenses. Realisation Expenses were Rs. 2,500. Realisation Account will be debited by

a) Rs. 5,000.

b) Rs. 2,500.

c) Rs. 7,500.

d) None of these.

Answer: A

Question: A firm is dissolved, Raman, a partner is to carry out dissolution for which he will get Rs. 50,000, including expenses. Realisation Expenses were Rs. 25,000, which were paid by the firm. Realisation Account will be debited by

a) Rs. 50,000.

b) Rs. 25,000.

c) Rs. 75,000.

d) None of these.

Answer: A

Question: How much amount will be paid to Creditors for Rs.25,000 if Rs.5,000 of the creditors are not to be paid and the remaining creditors agreed to accept 5% less amount?

a) Rs. 18,750

b) Rs. 19,000

c) Rs. 19,750

d) Rs.20,000

Answer: B

Question: P, a partner, is to bear all expenses of realisation for which he is to be paid Rs.2,000. P had to pay realisation expenses of Rs.2,500. How much amount will be debited to Realisation Account?

a) Rs.500

b) Rs.2,500

c) Rs.4,500

d) Rs.2,000

Answer: D

Question: Which of the following is not transferred to Realisation Account:

a) Balance of Cash Account

b) Balance of Reserves

c) Balance of Profit & Loss Account

d) All of the Above

Answer: D

Question: On taking responsibility of payment of a liability of Rs.50,000 by a partner, the account credited will be :

a) Realisation Account

b) Cash Account

c) Capital Account of the Partner

d) Liability Account

Answer: C

Question: Cash balance shown in the Balance Sheet is shown on dissolution of firm in :

a) Realisation Account

b) Cash Account

c) Capital Account

d) None of the Account

Answer: B

Question: At time of dissolution of partnership firm, the balance of profit and loss account shown in the assets side of Balance sheet of the firm is transferred to:

a) Realisation Account

b) Cash Account

c) Capital Accounts of partners

d) Loan Accounts of partners

Answer: C

Question: At the time of dissolution of partnership firm, the amount of ‘Bills Payable’ shown in the liability side of Balance Sheet is transferred to :

a) Capital Accounts of Partners

b) Realisation Account

c) Cash Account

d) Loan Account of Partners

Answer: B

Question: On dissolution, the final balance of capital accounts are transferred to :

a) Realisation Account

b) Cash Account

c) Profit & Loss Account

d) Loan Accounts of Partners

Answer: B

Question: On dissolution of the firm, amount received from sale of unrecorded asset is credited to :

a) Partner’s Capital Accounts

b) Profit and Loss Account

c) Realisation Account

d) Cash Account

Answer: C

Question: Realisation A/c is a :

a) Nominal A/c

b) Real A/c

c) Personal A/c

d) Real A/c as well as Personal A/c

Answer: A

Question: In the event of dissolution of firm, the partner’s personal assets are first used for payment of the :

a) Firm’s liabilities

b) The personal liabilites

c) None of the two

d) Any of the two

Answer: B

Question: On dissolution, when a partner takes over an asset _____ Is debited

a) Realisation Account

b) Partner’s Capital Account

c) Cash Account

d) Asset Account

Answer: B

Question: In case of dissolution, assets are transferred to Realisation Account:

a) At Book Value

b) At Market Value

c) Cost or Market Value, whichever is lower

d) None of the Above

Answer: A