CBSE Class 12 Accountancy Retirement And Death Of Partner Worksheet Set A

Question. At the time of death of a partner, the adjustment of goodwill is done in which ratio?
a) Old profit sharing ratio
b) Gaining ratio
c) Sacrificing ratio
d) None of these

Answer : B

Question. Neeti, Preeti and Swati are partners sharing profit in the equal ratio. At the time of retirement of Neeti, Workmen Compensation Reserve (WCR) appears in the books at Rs 70,000. There is a claim of Rs 25,000 against it. The amount of WCR credited to Neeti’s capital account will be
a) Rs 33,300
b) 16,667
c) Rs 15,000
d) None of these

Answer : C

Question. On the death of a partner , his share in the profits of the firm till the date of his death is transferred to the
a) debit of profit and loss account
b) credit of profit and loss account
c) debit of profit and loss suspense account
d) credit of profit and loss suspense account

Answer : C

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 will acquire his/her share
a) old profit sharing ratio
b) new profit sharing ratio
c) equal ratio
d) None of the above

Answer : A

Question. ‘X’, ‘Y’ and ‘Z’ were partners sharing profits in the ratio of 1/2, 3/10  and 1/5. ‘X’ retires. The new ratio will be
a) 5 : 2
b) 1 : 1
c) 3 : 2
d) 5 : 1

Answer : C

Question. Gobind, Hari and Partap are partners. On retirement of Gobind, the goodwill already appears in the balance sheet at Rs 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 above

Answer : A

Question. The journal entry for writing-off goodwill already appearing in the books of account at the time of retirement of partner is
a) All Partner’s Capital A/c                 Dr
        To Goodwill A/c
b) Goodwill A/c                                 Dr
        To All Partner’s Capital A/c
c) Goodwill A/c                                 Dr
        To Retiring Partner’s Capital A/c
d) None of the above

Answer : A

Question. ……… account is prepared when partners decide to give effect to revaluation of assets and liabilities without affecting their book value.
a) Revaluation
b) Memorandum revaluation
c) Memorandum suspense
d) None of the above

Answer : B

Question. ‘A’, ‘B’ and ‘C’ were in partnership sharing profits and losses equally. ‘B’ retires. After adjustments, his capital account shows a credit balance of Rs 1,20,000 as on 1st April, 2021. The balance due to ‘B’ is to be paid in three equal instalments together with interest @ 5% per annum. Amount to be paid to ‘B’ on 30th March, 2022 will be
a) Rs 60,000
b) Rs 40,000
c) Rs 46,000
d) Rs 54,000

Answer : C

Question. Abhishek, Rajat and Vivek are partners sharing profits in the ratio of 5 : 3 : 2. If Vivek retires, the new profit sharing ratio between Abhishek and Rajat will be
a) 3 : 2
b) 5 : 3
c) 5 : 2
d) None of these

Answer : B

Question. The old profit sharing ratio among Rajender, Satish and Tejpal were 2 : 2: 1. The new profit sharing ratio after satish’s retirement is 3 : 2. The gaining ratio is
a) 3 : 2
b) 2 : 1
c) 1 : 1
d) 2 : 2

Answer : C

Question. Anand, Bahadur and Chander are partners. Sharing profit equally on Chander’s retirement, his share is acquired by Anand and Bahadur in ratio of 3 : 2. The new profit sharing ratio between Anand and Bahadur will be
a) 8 : 7
b) 4 : 5
c) 3 : 2
d) 2 : 3

Answer : A

Question. A, B and C are partners with capitals Rs 1,00,000, Rs 75,000 and Rs 50,000 respectively. On C’s retirement, his share is acquired by A and B in ratio of 5 : 3. Gaining ratio will be
a) 3 : 2
b) 2 : 2
c) 5 : 3
d) None of these

Answer : C

Question. How revaluation account will be affected if there is an increase in liability and decrease in asset by the same amount?
a) Profit on revaluation
b) Loss on revaluation
c) No profit, no loss
d) Cannot be determined

Answer : C

Question. On retirement/death of a partner, the retiring/deceased partner’s 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 above

Answer : A

Question. ‘P’, ‘Q’ and ‘R’ are partners sharing profits in the ratio of 2 : 1 : 1. ‘R’ retires and assets and liabilities are revalued; resulting in a profit of Rs 12,000. ‘R’s’ share will be
a) Rs 6,000
b) Rs 3,000
c) Rs 2,000
d) None of these

Answer : B

Question. Decrease in liability at the time of retirement of partner is
a) debited to revaluation account
b) credited to revaluation account
c) debited to goodwill account
d) Both (b) and (c)

Answer : B

Question. On the death of a partner, the amount due to him will be credited to
a) all partner’s capital accounts
b) remaining partner’s capital accounts
c) hist executor’s account
d) governments’ revenue account

Answer : C

Question. The ratio in which the retiring partner’s share of goodwill is debited to the capital accounts of continuing partners’ is
a) old ratio
b) new ratio
c) gaining ratio
d) sacrificing ratio

Answer : C

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. Raman’s share of goodwill will be adjusted
a) by debiting Chaman’s capital account and Suman’s capital account with Rs 15,000 each
b) by debiting Chaman’s capital account and Suman’s capital account with Rs 21,429 and Rs 8,571 respectively
c) by debiting only Suman’s capital account with Rs 30,000
d) by debiting Raman’s capital account with Rs 30,000

Answer : C

Question. In case of retirement of a partner, profit or loss on revaluation of assets and re-assessment of liabilities is distributed among ……… in ………
profit sharing ratio.
a) all the partners, old
b) all the partners, new
c) other than retiring partner, old
d) other than retiring partner, new

Answer : A

Question. Unless agreed otherwise, it is presumed that the continuing partners gain in their ………… and hence their ……… is same as their old profit sharing ratio.
a) new profit sharing ratio, gaining ratio
b) new profit sharing ratio, sacrificing ratio
c) old profit sharing ratio, sacrificing ratio
d) old profit sharing ratio, gaining ratio

Answer : D

Question. ……… goodwill is the excess of total capital of firm over the actual combined capital of partners.
a) Hidden
b) Old
c) New
d) None of these

Answer : A

Question. The old profit sharing ratio among Rajender, Satish and Tejpal were 2 : 2: 1. The new profit sharing ratio after satish’s retirement is 3 : 2. The gaining ratio is
a) 3 : 2
b) 2 : 1
c) 1 : 1
d) 2 : 2

Answer : C

Question. Which of the following statements is/are incorrect?
(i) Revaluation of asset is necessary because present value of assets is different from market value.
(ii) A partner can retire from the firm with the consent of all the partners only.
Codes
a) Only (i)
b) Only (ii)
c) Both (a) and (b)
d) None of these

Answer : C

Question. At the time of retirement of Mahesh, value of stock is given Rs 60,000 in the balance sheet of the firm. Pass a journal entry when found stock is undervalued by Rs 15,000.
a) Revaluation A/c             Dr 15,000
         To Stock A/c                                  15,000
b) Stock A/c                      Dr 15,000
         To Revaluation A/c                         15,000
c) Stock A/c                       Dr 45,000
         To Revaluation A/c                         45,000
d) Revaluation A/c              Dr 45,000
         To Stock A/c                                  45,000

Answer : B

Question. Claim of the retiring partner is payable in which of the following form?
a) Fully in cash
b) Fully transferred to loan account to be paid later with some interest on it
c) Partly in cash and partly as loan repayable later with agreed interest
d) Any of the above method

Answer : D

Question. What treatment is made for accumulated profits and losses on the retirement of a partner?
a) Credited to all partner’s capital accounts in old ratio.
b) Debited to all partner’s capital accounts in old ratio.
c) Credited to remaining partner’s capital accounts in new ratio.
d) Credited to remaining partner’s capital accounts in gaining ratio.

Answer : A

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) retiring partners only
b) remaining partners (who have sacrificed) as well as retiring partners
c) remaining partners only (who have sacrificed)
d) None of the above

Answer : B

Question. Find the incorrect pair.

Codes
a) A-(i)
b) B-(ii)
c) C-(iii)
d) D-(iv)

Answer : A

Question. P, Q and R were partners in a firm. On 31st March, 2021, R retired. The amount payable to R Rs 2,17,000 was transferred to his loan account. R agreed to receive interest on this amount as per the provisions of Partnership Act, 1932. State the rate at which interest will be paid to R.
a) 12%
b) 6%
c) 10%
d) None of the above

Answer : B