Practice Test

Q1) To revalue assets & liabilities on a admission,retirement or death of partner______is opened. Show Answer

Q2) A partner may retire________ Show Answer

Q3) Gain ratio = ________Minus________ Show Answer

Q4) The amount due to the retiring partner can be made by_______ Show Answer

Q5) Before a partner retires,reserve created out of profits or balances in profit and loss account must be transferred to the capital accounts of all the partners in________ Show Answer

Q6) Balance in revaluation account is transferred to old partners in________ Show Answer

Q7) Increase in liability at the time of retirement of partner is_______ Show Answer

Q8) Decrease in liability at the time of retirement of partner is________ Show Answer

Q9) Increase in assets at the time of retirement of partner is______ Show Answer

Q10) Decrease in assets at the time of retirement of partner is_______ Show Answer

Q11) The executors of the deceased partner are entitled to a share of profit earned by the firm from the date of last balance sheet and to the date of death.Which of the entry will be passed for this purpose ? (Name of the deceased partner was Mr.X) Show Answer

Q12) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.Calculate the new profits sharing ratio of A and C if B gives his share to A and C in the original ratio of A and C. Show Answer

Q13) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.Calculate the new profits sharing ratio of A and C if B gives his share to A and C in the equal proporation. Show Answer

Q14) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.Calculate the new profits sharing ratio of A and C if B gives his share to A and C in the ratio of 3:1. Show Answer

Q15) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.Calculate the new profit sharing ratio of A and C if B gives his share to A only Show Answer

Q16) A,B and c are partners sharing profits and losses in the ratio of 3:2:1.B retired from the firm.Partners A and C decided to take his share in 3:1 ratio.What is the new ratio of partners A and C ? Show Answer

Q17) A,B and C are partners wit profits sharing ratio 4:3:2.B retires.If A & C share profits of B in 5:3,then find the new profit shring ratio Show Answer

Q18) Ram & Rahim partners sharing profits and losses in the ratio of their effective capital.They had Rs.2,00,000 and Rs.1,20,000. respectively in their capital accounts as on 1st january,2012.Ram introduced a further capital of Rs.20,000 on 1st April,2012 and another Rs.10,000 on 1st july,2012.on 30th September,2012 Ram withdrew Rs.80,000.On 1st july,2012,Rahim introduced futrther capital of Rs.60,000.Calculate the profit sharing ratio of the Ram & Rahim Show Answer

Q19) A,B and C are partners sharing profits and losses in the ratio of 3:2:1.B retired from the firm.What is the gain ratio of the partners A and C ? Show Answer

Q20) X,Y and Z are partners sharing profits and losses in the ratio of 3:2:1.Y retired from the firm.Net profit sharing ratio between X & Z is 5:3.What is the ratio of the partners X and Z ? Show Answer

Q21) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.B gives his share to A and C in the original ratio of A and C.What is the gain ratio ? Show Answer

Q22) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.B gives his share to A and C in equal proportion .What is the gain ratio ? Show Answer

Q23) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.B gives his share to A and C in ratio of 3:1 What is the gain ratio ? Show Answer

Q24) A,B and C are partners in a firm sharing profits and losses in the ratio of 4:3:2.B decided to retire from the firm.B gives his share to A only.What is the gain ratio ? Show Answer

Q25) P,Q & R are three partners sharing profit & loss in 5:3:2 ratio.P retires from the firm.Q & R decided to continue in new ratio 3:2.On the date o retirement stock,sundry debtors and provision for bad debts stand in the books at Rs.50,000,45,000 & 4,500.The partners decided to revalue assets as under.Stock to be reduced to 90%.provision for bad debts to be brought to 15%.Find the distribution of profit/loss on revaluation. Show Answer

Q26) Outgoing partner is compensated for parting with firm's future profits in favor of remaining partners. In what ratio do the remaining partner s contribute to such compensation amount? Show Answer

Q27) Claim of the retiring paper is payable in the following form: Show Answer

Q28) At the time of retirement of a partner, firms gets _________ from the insurance company against the Joint Life Policy taken severally for each partner. Show Answer

Q29) As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the dead partner at __________ percentage per annum. Show Answer

Q30) When premium paid on JLP taken up severally for each partner, the amount received on death of a partner would be firm's profit. It is also necessary to credit Partner's Capital Account with ______ of the policy on the lives of the remaining partners. Show Answer

Q31) To provide funds to pay to the retiring partner or to the representative of a deceased partner generally partner creates: Show Answer

Q32) At the time of death of a partner, firms gets __________ from the insurance company against the Joint Life Policy taken jointly for all partners and policies taken severally for each of the partner. Show Answer

Q33) A,B and C takes a Joint Life Policy. After five years, B retires from the firm. Old profit sharing ratio is 2:2:1. After retirement, A and C decide to share profits equally. Then had taken a Joint Life Policy of Rs 2,00,000 with the Surrender Values Rs 30.000. What will be the treatment in the Partner's Capital Account on receiving the JLP amount if Joint Life Policy A/c is maintained at Surrender Value along with the reserve for JLP? Show Answer

Q34) Balance of M/s A, B and C, sharing profits and losses in proportionate to their capitals, stood as follows: Capital Account: Rs 3,00,000; Rs 2,00,000 and Rs 1,00,000 respectively. A desired to retire from the firm and the remaining partners decided to carry on. Joint Life Policy of the partners is Surrendered ans cash obtained Rs 50,000. What will be the treatment for JLP? Show Answer

Q35) A, B and C are the partners sharing profits and losses in the ratio 2:1:1, firm has a Joint Life Policy of Rs 1,40,000 and in the balance sheet it is appearing at the surrender value i.e. Rs 40,000. On the death of A, how this JLP will be shared among the partners? Show Answer

Q36) A,B and C were partners sharing profits and losses in the ratio of 3:2:1. A retired and goodwill of the firm is to be valued at Rs 50,000 and Goodwill Account is to be raised which is not appearing in the balance sheet. What will be the treatment for goodwill? Show Answer

Q37) A,B and C are partners with profit sharing ratio 4:3:2. B Retires and Goodwill Rs 30,000 was shown in books of account. If A & C share profits of B in 5:3, then find the new profit sharing ratio. Show Answer

Q38) A,B and C are partners with profit sharing ratio 4:3:2. B retires and goodwill was valued Rs 10,800. If A & C share profits in 5:3, find out the goodwill shared by A and C in favour of B. Show Answer

Q39) The capitals of A,B and C are Rs 1,00,000; Rs 75,000 and Rs 50,000, profits are shared in the ratio of 3:2:1. B retires on the basis of firm purchased by A and C. The new ratio between A and C is 3:1, find the capital of A and C. Show Answer

Q40) A,B and C take a Joint Life Policy. After five years, B retires from the firm. Old profit sharing ratio is 2:2:1. After retirement A and C decide to share profits equally. They had taken a Joint Life Policy of Rs 2,00,000 with the Surrender Value Rs 30,000. What will be the treatment in the partner's capital account on receiving the JLP amount if, Joint Life premium is fully charged to revenue as and when paid? Show Answer

Q41) A,B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. The capital balance are Rs 50,000 for A, Rs 70,000 for B, Rs 35,000 for C. B declared to retire from the firm and balance in reserve on the date was Rs 25,000. If goodwill of the firm was valued as Rs 30,000 and profit on revaluation was Rs 7,500 then, what amount will be payable to B? Show Answer

Q42) At the event of retirement, the remaining partners will pay the amount of Goodwill to the retiring partner in: Show Answer

Q43) Amar, Akbar, Anthony and Suleman are partners sharing profits and losses in the ratio 1/3,1/6,1/3 and 1/6 respectively. Anthony retires and Amar Akbar and Suleman decide to share the profits and losses equally in future. Which of the statements hold true. Show Answer

Q44) As per which Accounting Standard, goodwill can be recorded in the books only when some consideration in money or money's worth has been paid for it. Show Answer

Q45) When Memorandum Revaluation Account is opened: Show Answer

Q46) Aman, Ashish & Manish are partners in a business and divide profits and losses in the ratio of 15:9:8 respectively. Manish retires. Aman and Ashish decide to share profits in equal proportions. Calculate the gaining ratio. Show Answer

Q47) At the time of retirement of a partner, if the goodwill appears in the Balance Sheet, it must be written off. The Capital Accounts of all partners are debited in: Show Answer

Q48) Joint Life Policy is taken by the firm on the life(s) of ______. Show Answer

Q49) A, B and C are partners sharing profit in the ratio 2:2:1, on retirement of B, goodwill was valued as rs 30,000. Find the contribution of A and C to compensate B. Show Answer

Q50) A,B and C were partners in a firm sharing profits and looses in the ratio of 2:2:1 respectively with the capital balance of Rs 50,000 for A and B for C Rs 25,000. B declared to retire from the firm and balance in reserve on the date was Rs 15,000. If goodwill of the firm was valued as Rs 30,000 and profit on revaluation was Rs 7,050 then, what amount will be transferred to the loan account of B: Show Answer

Q51) A, B and C share profits and losses of a firm on 1 : 1 :1 basis. B retired from business and his share is purchased by A and C is 70 : 90. New profit sharing ratio below A and C would be Show Answer

Q52) A, B and C Share Profits and losses of a firm on 1 :1 :1 basis. B retired from business and his share is purchased by A and C in 40 : 60 ratio. New profit and loss sharing ratio between A and C would be: Show Answer

Q53) At the time of retirement of a partner from a partnership firm, the adjustment of goodwill is done in: Show Answer