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1. In the absence of a Partnership Deed, partners are entitled to .........

(a) Salary                                             (b) Commission

(c) Profit sharing in capital ratio  (d) Interest on loans and advances.

Ans:       (d) Interest on loans and advances.        

2. On 31st December, 2008, stock appeared at ₹ 27,000 in the balance sheet of M/s XYZ. Additional Information:

C joins the firm and it was found that stock was valued at 10% lower than the book value. What amount of stock will be shown in the Revaluation A/c.         

 (a) ₹ 3,300                          (b) ₹ 3,000

(c) ₹ 2, 970                          (d) ₹ 2,700.

Ans:       (b) ₹ 3,000

3. Mr. Kumar withrew ₹ 50,000 on 31st Jan, 2019. Books are closed on 31st March every year. Charge interest on drawing @ 12.5% p.a. Interest on Drawing for the year ending 31st March, 2019....

(a) ₹ 521                               (b) ₹ 1,041.66

(c) ₹ 3,125                           (d) ₹ 6,250

Ans:       (b) ₹ 1,041.66

               

4. A and B are partners sharing profits and losses in the ratio of 3 : 2 A’s capital is ₹ 30,000 and B’s capital is ₹ 15,000 before adjusting Revaluation Loss of ₹ 7,000 and General Reserve of ₹ 12,000. They admitted C, and agreed to give him 1/5 share of profits. C should bring proportionate capital. Calculate C’s Capital.

(a) ₹ 11,250                         (b) ₹ 12,000

(c) ₹ 14,500                         (d) ₹ 12,500.

Ans:       (d) ₹ 12,500.

5. A and B are partners sharing profits and losses in the ratio of 5 : 3. They admitted C for 1/4 share which he acquired 1/6th from A and 1/12th from B In what ratio C has been Compensated by A and B ?

(a) 5 : 3                                 (b) 2 : 1

(c) 1 : 2                                  (d) 3 : 2

Ans:       (b) 2 : 1

6. A and B are partners with capitals of ₹ 26,000 and ₹ 18,000 respectively. They admitted C as a partner with 1/5 share in the profit of a firm. C brings in ₹ 16,000 as his capital. What amount of goodwill C should bring?

(a) ₹ 8,800                           (b) ₹ 8,000

(c) ₹ 4,000                           (d) ₹ 4,400.

 6.           (c) ₹ 4,000          

 

7. A, B and C are equal partners in a firm having Capitals ₹ 30,000, ₹ 20,000, and ₹ 10,000 respectively on 1st April, 2019. On the same day B retired and took away an unrecorded typewriter of ₹ 6,000. What balance amount shall be paid to B on account of his retirement?

(a) ₹ 16,000                         (b) ₹ 26,000

(c) ₹ 28,000                         (d) ₹ 20,000.

7.            (a) ₹ 16,000        

 

8.  X, Y and Z are sharing profits in the ratio of 4 : 3 : 2. X, retired Y and Z will compensate X. In the             ratio of 5 : 3. Firm’s Goodwill ₹ 27,000. For treatment of goodwill Y and Z will be debited with .........

(a) ₹ 16,875 and ₹ 10,125 respectively

(b) ₹ 7,875 and ₹ 4,125 respectively

(c) ₹ 7,500 and ₹ 4,500 respectively

(d) ₹ 7,000 and ₹ 5,000 respectively.

Ans:       (a) ₹ 16,875 and ₹ 10,125 respectively    

9. Ram, Shyam and Mohan are partners sharing profit and losses in the ratio of 3 : 2 : 1. Shyam retired. If he acquires ₹ 20,000 from Ram and ₹ 12,000 from Mohan as his share of goodwill. New profit sharing ratio of Ram and Mohan will be .........

(a) 3 : 1                                 (b) 17 : 7

(c) 5 : 3                                  (d) 2 : 1

Ans:       (b) 17 : 7              

10. X, Y and Z are partners sharing profits in 3 : 2 : 1 Y retires on 1st April, 2018 and amount transferred to his loan A/c is ₹ 81,000 which is payable in three equal annual instalments together with interest @ 10% p.a. The total amount paid for the last instalment along with interest will be

(a) ₹ 29,700                         (b) ₹ 35,100

(c) ₹ 59,400                         (d) ₹ 27,000

Ans:       (a) ₹ 29,700        

11. Ramesh, Deepika and Suresh are the partners sharing profits in the ratio of 7 : 5 : 4 Suresh died on 30 June, 2019 and Sales during the current year till death is ₹ 2,00,000. Profit margin is 20%. How much share of profits will be credited to Suresh’s capital A/c (accounts are closed on 31st March every year).

(a) ₹ 2,500                           (b) ₹ 5,000

(c) ₹ 7,500                           (d) ₹ 10,000

Ans:       (d) ₹ 10,000

12. P, a partner is to bear all expenses of realisation for which he is to be paid ₹ 2,000. P had paid realisation expenses of ₹ 2,500. How much amount will be debited to Realisation A/c.

(a) ₹ 2,000                           (b) ₹ 2,500

(c) ₹ 4,500                           (d) ₹ 5,00.

Ans:       (a) ₹ 2,000

13. Creditors are ₹ 25,000 Creditors worth ₹ 5000 agreed to accept typewriter costing ₹ 6,500 in full settlement and remaining creditors agreed to accept 5% less amount. How much amount will be paid to the creditors at the time of dissolution of the firm?

 (a) ₹ 23,750                        (b) ₹ 17,775

(c) ₹ 19,000                         (d) ₹ 28,500

Ans:       (c) ₹ 19,000                        

14. A and B started business on 1st July 2018 who share profits in the ratio of 3 : 1. They contributed ₹ 40,000 and ₹ 30,000 respectively by way of capital on which they agree to allow interest @ 6% p.a. irrespective of profits. Profits earned during the year ending 31st March, 2019 (before allowing interest on capital) was ₹ 3,000. The effect of above situation will be:

(a) Profit ₹ 3,000 will be divided among partners in the ratio of their interest

on capital

(b) Loss ₹ 1,200 will be divided among partners in the ratio of 3 : 1

(c) Loss of ₹ 150 will be divided among A and B in 3 : 1

(d) Loss of ₹ 150 will be divided among A and B in 4 : 3

Ans:       (c) Loss of ₹ 150 will be divided among A and B in 3 : 1

               

15. Mr. A withdrew X ₹ 4,000 in the beginning of every quarter starting from 1st October 2018. The amount of interest on Drawings charged from him @ 18% p.a., when books are closed on 31st March every year will be:

(a) ₹ 180                               (b) ₹ 360

(c) ₹ 600                               (d) ₹ 540

Ans:       (b) ₹ 360

               

 

16. When there is a change in the profit sharing ratio among the existing partners, the following is true.

(a) The sacrificing partner has to compensate the gaining partner

(b) The gaining partner has to compensate the sacrificing partner

(c) One sacrificing partner has to compensate the other sacrificing partner

(d) One gaining partner has to compensate the other gaining partner.

Ans:       (b) The gaining partner has to compensate the sacrificing partner

17. A and B are partners sharing profits and losses in the ratio of 3 : 2. C is admitted for 1/4th share for which he gives ₹ 30,000 and ₹ 40,000 as premium to A and B respectively. The new profit sharing ratio of A, B and C will be:

(a) 3 : 2 : 1                            (b) 12 : 8 : 5

(c) 9 : 6 : 5                            (d) 3 : 2 : 1

Ans:       (c) 9 : 6 : 5           

18. The value of stock given in the old Balance sheet was ₹ 33,000 which was over-valued by 10%. The effect of the above transaction in Revaluation account will be:

(a) ₹ 3,000 will be debited to Revaluation account

(b) ₹ 3,300 will be debited to Revaluation account

(c) ₹ 33,000 will be credited to Revaluation account

(d) ₹ 3,300 will be credited to Revaluation account

Ans:       (a) ₹ 3,000 will be debited to Revaluation account

19. X and Y are partners in a firm with capital of ₹ 18,000 and 20,000. Z was admitted for 1/3rd share in profit and brings ₹ 24,000 as capital, calculate the amount of goodwill of firm:

(a) ₹ 24,000                         (b) ₹ 20,000

(c) ₹ 15,0000                       (d) ₹ 10,000

Ans:       (d) ₹ 10,000

                 

20. In what way the Revaluation account will be affected with the information given below:

Balance Sheet

Liabilities              Amount

Workmen’s Compensation Fund              ₹ 20,000 Adjustment: Liability against Workmen’s compensation Fund was estimated to be ₹ 22,000.

(a) ₹ 2,000 will be debited to Revaluation account

(b) ₹ 2,000 will be debited to partners’ capital account

(c) ₹ 22,000 will be debited to partners’ capital account

(d) ₹ 22,000 will be debited to Revaluation account

Ans:       (a) ₹ 2,000 will be debited to Revaluation account            

 

21. A, B and C were partners sharing profits in the ratio of 5 : 4 : 9. B retired on 1st April 2019 and his share was taken by remaining partners in the ratio of 1 : 3. After B’s retirement the new ratio of A and C will be:

(a) 1 : 4                                 (b) 1 : 2

(c) 1 : 3                                  (d) 5 : 9

Ans:       (b) 1 : 2

 

22. A and B are partners sharing profits and losses in 3 : 2. C is admitted for 1/5th share which he acquires 1/10th from A and 1/10th from B. He brings ₹ 20,000 as capital and Capital Balances of A and B after making all adjustments are

₹ 60,000 and ₹ 25,000 respectively.

If the capital accounts of old partners are to be adjusted on the basis of C’s capital and his profit share in the new firm, the actual amount of cash to be paid off or brought in by the old partners to maintain their capital balances in their new ratio will be:

(a) Surplus capital of ₹ 12,000 will be withdrawn by A and Deficit capital of 7,000 will be brought in by B

(b) Surplus capital of ₹ 7,000 will be withdrawn by A and Deficit capital of

₹ 12,000 will be brought in by B

(c) Surplus capital of ₹ 10,000 will be withdrawn by A and Deficit capital of

₹ 5,000 will be brought in by B.

(d) Surplus capital of 5,000 will be withdrawn by A and Deficit capital of

₹ 10,000 will be brought in by B

Ans:       (c) Surplus capital of ₹ 10,000 will be withdrawn by A and Deficit capital of

₹ 5,000 will be brought in by B.

               

23. A, B and C were partners sharing profits in the ratio of 2 : 2 : 1. C retired and the amount due to him was paid in three equal annual installments together with interest @10% p.a. If the amount of last installment paid along with interest was ₹ 9,900, the total amount paid as the second installment will be:

 (a) ₹ 19,800                        (b) ₹ 10,900

(c) ₹ 11,800                         (d) ₹ 10,800

Ans:       (d) ₹ 10,800

               

24. A, B and C were partners sharing profits in the ratio of 5: 3: 2. C died on 31st July, 2019 i.e. after four months of closing of books. His share in the profits of the firm till the date of death was to be calculated on the basis of

                the previous years’ profits which was 30% of ‘the sales of ₹ 5,00,000. The

amount of C’s share of profit will be:

(a) ₹ 8,000                           (b) ₹ 10,000

(c) ₹ 11,800                         (d) ₹ 9,000

Ans:       (b) ₹ 10,000

 

25. On dissolution of a firm, what entry is passed when realization expenses are paid by a partner?

(a) Realisation A/c will be debited and partner’s capital A/c will be credited.

(b) Realisation A/c will be credited and partner’s capital A/c will be debited.

(c) Partner’s capital A/c will be debited and bank A/c will be credited.

(d) Realisation A/c will be debited and bank will be credited.

Ans:       (a) Realisation A/c will be debited and partner’s capital A/c will be credited.

               

26. At the time of dissolution of a firm the stock’s book value was ₹ 40,000, 60% of which was taken over by X one of the creditor for 25,000 in full settlement and remaining was sold at 90%. The amount of cash realized through this transaction will be:

(a) ₹ 13,500                         (b) ₹ 14,400

(c) ₹ 8,100                           (d) ₹ 13,000

Ans:       (b) ₹ 14,400       

 

27. In the absence of partnership agreement which of the following not provided:

(a) Equal Profit Sharing

(b) Commission to manager

(c) Rent to a partner

(d) Salary for working extra hours

Ans:       (d) Salary for working extra hours           

 

28. Mr Yuvraj was allowed to withdraw ₹ 24,000 at the end of every half year. The interest on such drawings to be charged @12% p.a. The amount of interest on drawings will be:

(a) ₹ 2,880                           (b) ₹ 1,440

(c) ₹ 2,400                           (d) ₹ 2,000

Ans:       (b) ₹ 1,440

               

29. A, B and C are in a partnership business. A used ₹ 1,00,000 belonging to the firm and made a profit of ₹ 75,000 by speculation. Suggest which decision should be taken by the firm?

(a) A needs to return ₹ 1,00,000 to the firm.

(b) A will sacrifice his share of profit to the extend of ₹ 75,000 in that year.

(c) A needs to pay back ₹ 1,00,000 equally to B and C.

(d) A needs to return ₹ 1,75,000 to the firm.

Ans:       (d) A needs to return ₹ 1,75,000 to the firm.       

 

30. The profit earned by a firm after retaining ₹ 5,000 to its reserve was ₹ 60,000.

The normal rate of return is 10%. The firm has total tangible assets worth

₹ 6,00,000 and outside liabilities ₹ 2,80,000. The value of the goodwill as per capitalisation of average profit method will be:

(a) ₹ 3,30,000                     (b) ₹ 2,80,000

(c) ₹ 2,30,000                     (d) ₹ 3,20,000

 Ans:      (a) ₹ 3,30,000    

 

31.          A, B and C are partners sharing profits in the ratio of 3 : 1 : 1. It was provided in the deed that C’s share of profit will not be less than ₹ 15,000 per annum and interest on A’s loan to be paid ₹ 5,000. The loss of the firm for the year ended 31st March 2019 were ₹ 1,30,000 before payment of interest on A’s loan. The net effect of the above will be:

(a) Loss of ₹ 1,30,000 will be divided among A, B and C in 3 : 1 : 1.

(b) Loss of ₹ 1,45,000 will be divided among A, B and C in 3 : 1 : 1

(c) Profit of ₹ 1,15,000 will be divided among A and B in 3 : 1

(d) Loss of ₹ 1,50,000 will be divided among A and B in 3 : 1

Ans:       (d) Loss of ₹ 1,50,000 will be divided among A and B in 3 : 1

               

32. P and Q are partners sharing Profits in the ratio of 2 : 1. R is admitted to the partnership with effect from 1st April on the term that he will bring ₹ 20,000 as his capital for 1/4th share and pays ₹ 9,000 for goodwill, half of which is to be withdrawn by P and Q. If profit on revaluation is ₹ 6,000 and opening capital of P is ₹ 40,000 and of Q is ₹ 30,000, find the closing capital balance of each partner.

(a) ₹ 40,000; ₹ 30,000; ₹ 20,000

(b) ₹ 50,000; ₹ 35,000; ₹ 20.000

(c) ₹ 47,000; ₹ 33,500; ₹ 20,000

(d) ₹ 41,000; ₹ 30,500; ₹ 29,000

Ans:       (c) ₹ 47,000; ₹ 33,500; ₹ 20,000

33. Revaluation account (or alternatively profit and loss adjustment account)

is a:

(a)Real account                 (b) Nominal account

(c) Personal account.      (d) Tangible account

Ans:       (b) Nominal account

34. The balance in the investments fluctuation fund, after meeting the loss on revaluations of investments, at the time of retirement of a partner will be transferred to:

(a) The capital reserve   (b) The revaluation account

(c) The general reserve (d) The old partners capital account

Ans:       (d) The old partners capital account        

 

35. X and Y are partners sharing profits in the ratio of 2 : 1. They admit Z into the partnership for 1/4th share in profits for which he brings in ₹ 20,000 as his share of capital. Hence on the basis of new profit sharing ratio, the adjusted capitals of X and Y will be:

(a) ₹ 40,000 and ₹ 20,000 respectively.        

(b) ₹ 32,000 and ₹ 16,000 respectively.

(c) ₹ 60,000 and ₹ 30,000 respectively.

(d) ₹ 35,000 and ₹ 25,000 respectively.

Ans:       (a) ₹ 40,000 and ₹ 20,000 respectively.        

36. The capital balances of Varsha and Ananya are ₹ 25,000 and ₹ 20,000 respectively after making all the adjustments. If Radhika, incoming partner is to bring in 1/3rd of the total capital of the firm, and then her share of capital will be:

 (a) ₹ 15,000                        (b) ₹ 21,500

(c) ₹ 22,500                         (d) ₹ 25,500

Ans:       (c) ₹ 22,500        

 

37. If the adjustment in the values of assets and liabilities at the time of the admission of a partner shows profit, the same should be credited to the capital accounts of:-

(a) The old partners in their new profit sharing ratio.

(b) All partners in their new profit sharing ratio.

(c) The old partners in their old profit sharing ratio.

(d) The old partners in their sacrificing ratio.

Ans:       (c) The old partners in their old profit sharing ratio.

38. At the time of retirement of a partner, if goodwill appears in the balance sheet, it must be written off, the capital accounts of all partners are debited in.

(a)The gaining ratio         (b) The new sharing profit ratio

(c) The capital ratio.        (d) The old profit sharing ratio

Ans:       (d) The old profit sharing ratio

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

(a) ₹ 50,820                         (b) ₹ 70,820

(c) ₹ 25,820                         (d) ₹ 58,820.

Ans:       (b) ₹ 70,820

40. A, B and C are partners in a firm sharing profit/loss in the ratio of 2 : 2 : 1. On March 31, 2018 C died. Accounts are closed on December,31 every year. The sales for the year 2017 was ₹ 30,00,000 and the profits were ₹ 3,00,000 The sales for the period from January 1, 2018 to March 31, 2018 were

₹ 10,00,000. The share of deceased partner in the current year’s profits on

the basis of sales is:

(a) ₹ 1,00,000                     (b) ₹ 40,000

(c) ₹ 15,000                         (d) ₹ 20,000

Ans:       (d) ₹ 20,000

41.Revaluation of assets on the reconstitution of partnership is necessary because their present value may be different from there ............

(a) Book value                   (b) Historical value

(c) Market value               (d) Realizable value

Ams:      (a) Historical value

               

42. The firm had borrowed ₹ 25,000 from Ram, a partner. The firm got dissolved, Ram decided to take over furniture against the payment of his loan in full settlement. Following journal entry will be passed for the above:

(a) Debit Ram’s loan and Credit Furniture

(b) Debit Ram’s loan and Credit Cash

(c) Debit Ram’s loan and Credit Realisation A/c

(d) Debit Realisation A/c and Credit Ram’s loan

Ans:       (c) Debit Ram’s loan and Credit Realisation A/c

 

43. Ms. Vidhi paid realisation expenses of ₹ 15,000 out of her funds, who was to get remuneration of ₹ 12,000 for completing the dissolution process and was responsible to bear all the realization expenses. Following journal entry will be passed for the above:

(a) Debit Realisation A/c and Credit Vidhi ₹ 12,000

(b) Debit Realisation A/c and Credit Cash ₹ 15,000

(c) Debit Realisation A/c and Credit Vidhi ₹ 15,000

(d) Debit Vidhi and Credit Cash ₹ 15,000

Ans:       (a) Debit Realisation A/c and Credit Vidhi ₹ 12,000

44. Which of the following is not a charge against profit?

(a) Rent paid to a partner             (b) Manager’s commission

(c)  Partner’s salary                         (d) Interest on partner’s loan.

Ans:       (c) Partner’s salary                         

45. A, B and C share profits in a partnership firm in the ratio of 5 : 3 : 2 with fixed capitals of ₹ 80,000; ₹ 60,000 and ₹ 20,000 respectively. Partners are entitled to interest on their capital @ 10% p.a. During the year firm earned profit of ₹ 11,200. State the amount of interest on capital payable to A, B and C respectively.

(a)  ₹ 4,000; ₹ 3,000; ₹ 2,000   (b) ₹ 5,600; ₹ 4,200; ₹ 1,400

(c)  ₹ 8,000; ₹ 6,000; ₹ 2,000   (d) ₹ 1,400; ₹ 4,200; ₹ 5,600

Ans:       (b) ₹ 5,600; ₹ 4,200; ₹ 1,400        

46. On 1st April, 2019, an existing firm had assets of ₹ 1,50,000 (including cash     ₹ 10,000). Its creditors were ₹ 10,000 on that date. The firm had a reserve fund of ₹ 20,000 on that date while partners’ capital account showed a balance of ₹ 1,20,000. If the usual rate of earning is 20% and goodwill is valued at ₹ 48,000 at four years’ purchase of super profits. What will be the average

profits of the firm.

(a) ₹ 30,000                                  (b) ₹ 35,000

(c) ₹ 40,000                                  (d) ₹ 45,000

Ans:       (c) ₹ 40,000                        

 

47. When a partner withdrew ₹ 5,000 at the end of every quarter. The average period to be considered for calculation of interest on drawings will be:

(a) 3 months                      (b) 4.5 months

(c) 7.5 months                   (d) 6 months

Ans:       (b) 4.5 months 

 

48. X, Y, Z are partners in a firm having fixed capitals ₹ 3,00,000; ₹ 2,00,000; and ₹ 1,00,000 respectively. Interest on Capital payable @10% p.a. was omitted while distributing profits. Identify the correct option to rectify the above omission

(a) Debit Z current A/c by ₹ 10,000 and credit X’s current A/c by ₹ 10,000

(b) Debit Z capital A/c by ₹ 10,000 and credit X’s capital A/c by ₹ 10,000

(c) Debit X current A/c by ₹ 10,000 and credit Z’s current A/c by ₹ 10,000

(d) Debit X capital A/c by ₹ 10,000 and credit Z’s capital A/c by ₹ 10,000

Ans:       (a) Debit Z current A/c by ₹ 10,000 and credit X’s current A/c by ₹ 10,000

 

49. A and B are partners in the ratio of 7 : 3. They admit C for 1/5 share, half of which he acquires in equal proportions from both and remaining half is given only by A to C. What is the sacrificing ratio?

 (a) 1 : 1                                 (b) 3 : 1

(c) 2 : 1                                  (d) 7 : 3

Ans:       (b) 3 : 1

               

50. A and B are partners sharing Profit and Loss in the ratio 3 : 2. From 1st April, 2019, they decided to share future Profit and Loss equally. On that date there was a debit balance of ₹ 30,000 in Profit and Loss A/c. What entry will be passed if the firm decided not to alter the values in books?

(a) Debit B’s Capital A/c ₹ 3,000 and Credit A’s Capital A/c ₹ 3,000

(b) Debit A’s Capital A/c ₹ 3,000 and Credit B’s Capital A/c ₹ 3,000

(c) Debit P&L A/c ₹ 30,000 and Credit A by ₹ 18,000 and B by ₹ 12,000

(d) Debit A by ₹ 18,000, B by ₹ 12,000 and Credit P&L A/c by ₹ 30,000

Ans:       (b) Debit A’s Capital A/c ₹ 3,000 and Credit B’s Capital A/c ₹ 3,000             

 

51. For which of the following, old profit sharing ratio is used at the time of new partner’s admission?

(a) When new partner doesn’t bring his goodwill share.

(b) When new partner brings his goodwill share.

(c) When new partner brings a part of his goodwill share.

(d) When goodwill already appears in the old books at the time of admission.

Ans:       (d) When goodwill already appears in the old books at the time of admission.    

52.Heena and Sudha share Profit and Loss equally. Their capitals were ₹ 1,20,000 and ₹ 80,000 respectively. There was also a balance of ₹ 60,000 in General reserve and revaluation gain amounted to ₹ 15,000. They admit friend Teena with 1/5 share. Teena brings ₹ 90,000 as capital. Calculate the amount of goodwill of the firm.

(a) ₹ 85,000                                         (b) ₹ 1,00,000

(c) ₹ 20,000                                         (d) None of the above.

Ans:       (a) ₹ 85,000                                        

 

53. Madan, Agarwal and Vikas are partners in a firm. On 31.03.2019 their adjusted closing capital balances were ₹ 45,000, ₹ 50,000 and ₹ 40,000 respectively. Bank balance appears at ₹ 13,000 on that day. Mr. Agarwal decides to retire from the firm from the above mentioned date. Madan and Vikas decide to pay him in cash by bringing in capital in such a manner so that ₹ 1,000 are left in the bank and their capitals are in the ratio of 2 : 1. What amount is contributed by them?

(a) ₹ 36,000 and ₹ 2,000

(b) ₹ 37,000 and ₹ 1,000

 (c) ₹ 38,000 and Nil        

(d) ₹ 39,000 and ₹1000

Ans:       (b) ₹ 37,000 and ₹ 1,000

 

54. There was a balance of ₹ 50,000 in Workmen’ compensation fund in balance sheet of X, Y and Z. On Z’s retirement there was workmen’ claim of ₹ 80,000. How will you treat this?

(a) Revaluation A/c Dr. ₹ 80,000                 (b) Revaluation A/c Cr. ₹ 30,000

(c) Revaluation A/c Cr. ₹ 80,000                 (d) Revaluation A/c Dr. ₹ 30,000

Ans:       (d) Revaluation A/c Dr. ₹ 30,000

 

55. Which of these will be paid first at the time of dissolution of firm?

(a) Partner’s capital                         (b) Partner’s Loan

(c) Partner’s wife’s Loan                               (d) All to be paid rateably

Ans:        (c) Partner’s wife’s Loan

 

56. Realisation expenses amounted to ₹ 20,000. Half of these expenses were paid by the firm and balance was paid by Yash, a partner. What entry should be passed?

(a) Realisation A/c Dr. 20,000

To Bank A/c 20,000

(b) Realisation A/c Dr 20,000

To Yash 20,000

(c) Realisation A/c Dr. 20,000

To Bank A/c 10,000

To Yash’s Capital A/c 10,000

(d) Realisation A/c Dr. 10,000

Yash’s Capital A/c Dr. 10,000

To Bank A/c 20,000

Ans:      (c) Realisation A/c Dr. 20,000

To Bank A/c 10,000

To Yash’s Capital A/c 10,000

57. In the absence of Partnership Deed, a Partner is entitled to interest on money advanced by him as additional capital to the firm at:

(a) 4% p.a.                                           (b) 8% p.a.

(c) 6% p.a.                                           (d) Nil

Ans:       (c) 6% p.a.

58. Interest on Partner’s loan is credited to:

(a) Partners Fixed Capital Account

(b) Partner’s Current Account

(c) Partner’s Loan Account

(d) Partner’s Drawings Account

Ans:       (c) Partner’s Loan Account

 

59. Sun and Moon are Partners in a firm sharing profits equally. Sun withdrew a fixed amount of ₹ 4000 beginning of every four months during 2018-19. If interest on drawings at 18% p.a. Interest on drawing will be:

(a) ₹ 1350                            (b) ₹ 720

(c) ₹ 1260                             (d) ₹ 1,440

Ans:       (d) ₹ 1,440

60. X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. After the final accounts have been prepared, it was discovered that interest on drawings amounting to ₹ 3000 and ₹ 2,400 for Y and Z respectively had not been taken into consideration. The adjustment entry for the above omission will be ............

(a) Dr. X ₹ 2,700, Cr. Y ₹ 1,200 and Cr. Z ₹ 1,500

(b) Cr. X ₹ 2,700, Dr. Y ₹ 1,200 and Dr. Z ₹ 1500

 (c) Cr. X ₹ 2,700, Dr. Y ₹ 1,500 and Dr. Z ₹ 1,200

(d) Dr. X ₹ 1,500, Cr. Y ₹ 900 and Cr. Z ₹ 600

Ans:       (b) Cr. X ₹ 2,700, Dr. Y ₹ 1,200 and Dr. Z ₹ 1500

 

61. Vijay Brothers earn an average profit of ₹ 30,000 with a capital of ₹ 2,00,000. The normal rate of return in the business is 10%. The value of goodwill through capitalization of super profit method is:

                (a) ₹ 1,00,000                     (b) ₹ 2,00,000

(c) ₹ 3,00,000                     (d) ₹ 10,000

Ans:       (a) ₹ 1,00,000    

 

62. M, C and Q were partners sharing profits in the ratio of 5 : 3 : 2. They now decide to change their profit sharing ratio to 3 : 2 : 1 in future. M’s sacrifice/ gain will be:

(a) Sacrifice by 1/30         (b) Gain by 1/30

(c) Sacrifice by 1/15         (d) No change

Ans:       (d) No change

 

63. Brain and Heart are partners sharing profits in 3 : 2. Mr. Soul is admitted for 1/5th share for which he brings ₹ 5,000 as premium in cash. The entire premium is retained by Brain and credited to his capital account. The new profit sharing ratio of Brain, Heart and Soul will be:

(a) 2 : 2 : 1                            (b) 3 : 2 : 1

(c) 2 : 1 : 1                            (d) 5 : 3 : 2

Ans:       (a) 2 : 2 : 1

 

64. Agni and Vaayu are partners sharing profits and losses in the ratio of 3 : 2. They admitted Jal into the firm for 1/5th share, which he takes entirely from Agni. There is a credit balance of ₹ 20,000 in the profit and loss account. They decided to continue to show such balances in the books of new firm. The entry will be:

(a) Dr. Agni 4,000 and Cr. Jal ₹ 4,000

(b) Dr. Jal ₹ 4,000 and Cr. Agni ₹ 4,000

(c) Dr. Agni ₹ 2,400, Dr. Vayu ₹ 1,600 and Cr. Jal ₹ 4,000

(d) Dr. Jal ₹ 4,000, Cr. Agni ₹ 2,400, Cr. Vayu ₹ 1,600

 Ans:      (b) Dr. Jal ₹ 4,000 and Cr. Agni ₹ 4,000

 

65. The capital balances of Charvi and Vaanya before crediting premium amount of ₹ 15,000 were ₹ 25,000 and ₹ 20,000 respectively. They admitted Khushi as partner, who brings 1/3rd of the total capital of the new firm. Her amount of capital will be:

(a) ₹ 40,000                         (b) ₹ 15,000

(c) ₹ 30,000                         (d) ₹ 20,000

 Ans:      (c) ₹ 30,000

 

66. X and Y were partners sharing profits and losses in the ratio of 3 : 2. Their capitals were ₹ 1,50,000 and ₹ 1,20,000 respectively. On 1st April 2019 they admitted Z for 1/6 share in firm’s profits. Z invested ₹ 72,000 as his capital contribution. There was a credit balance of ₹ 12,000 in the profit and loss account on the day of Z admission. The amount of goodwill credited to X’s capital account will be:

(a) ₹ 7,800                           (b) ₹ 13,000

(c) ₹ 5,200                           (d) ₹ 9,000

Ans:       (a) ₹ 7,800

 

67. At the time of admission of a new partner, what will be the effect for following given information

Balance Sheet

Liabilities                                              Amount

Workmen Compensation fund  ₹ 35,000

 Adjustment:

Liability against workmen’s compensation fund was estimated to be ₹ 40,000.

(a) ₹ 5,000 will be credited to Revaluation A/c

(b) ₹ 5,000 will be credited to Partners’ Capital A/cs

(c) ₹ 35,000 will be credited to Partners’ Capital A/cs

(d) ₹ 5,000 will be debited to Revaluation A/c

Ans:       (d) ₹ 5,000 will be debited to Revaluation A/c

 

 

68. Ranveer and Ishani are partners sharing profits in 3 : 2. Their capitals are ₹ 60,000 and ₹ 40,000 respectively. They admitted Chirag as a partner for 1/6th share, who brings ₹ 30,000 as capital and ₹ 5,000 as Goodwill. Partners of the new firm decided to adjust their capitals in the new profit sharing ratio. For the adjustment, amount to be paid or brought in by partners will be :

(a) Cash brought by Ranveer ₹ 27,000 and by Ishani ₹ 18,000

(b) Ranveer is paid ₹ 27,000 and Ishani is paid ₹ 18,000

(c) Cash brought by Ranveer ₹ 18,000 and Ishani is paid ₹ 27,000

(d) Cash brought in by Ranveer ₹ 21,000 and by Ishani ₹ 14,000

Ans:       (a) Cash brought by Ranveer ₹ 27,000 and by Ishani ₹ 18,000

 

69. The amount due to deceased partner Mr. Ramesh is paid to:

(a) Ramesh’s Father       (b) Ramesh’s Friends

(c) Ramesh’s Wife           (d) Ramesh’s Executors

Ans:       (d) Ramesh’s Executors

 

70. Revaluation Account is prepared at the time of

(a) Admission, Retirement, Death, Dissolution of Firm

(b) Admission, Retirement, Death, Dissolution of Partnership Agreement

(c) Admission, Retirement, Dissolution of Firm, Dissolution of Partnership Agreement

(d) Admission, Retirement and Death of a partner

 

Ans:       (d) Admission, Retirement and Death of a partner

71. Puneet, Pritam and Praneet are the partners sharing profits and losses in the ratio of 2 : 5 : 3. On 1st April 2018 Praneet got retired and balance due to him on account of capital, reserves, goodwill etc. amounted to ₹ 45,000 which was transferred to his loan account. Praneet’s loan was to be paid in three equal annual installments together with interest @10%p.a. starting from 31st March 2019. The amount of second installment including interest payable on 31st March 2020 will be:

(a) ₹ 19,500                         (b) ₹ 16,500

(c) ₹ 18,000                         (d) ₹ 50,500

Ans:       (c) ₹ 18,000        

72. On dissolution of a firm all assets are transferred to realization account at

(a)Book value                    (b) Market value

(c) Both (a) or (b)             (d) Cost price

Ans:       (a) Book value  

 

73. If Trade payables amounting to ₹ 15,000 are settled through Machinery of Book Value ₹ 18,000 during the dissolution of a firm, entry passed will be:

(a) No entry will be passed

(b) Dr. Realisation A/c and Cr. Cash A/c ₹ 3,000

 (c) Dr. Cash A/c and Cr. Realisation A/c ₹ 3,000

(d) Dr. Realisation A/c and Cr. Trade Payables A/c ₹ 3,000

Ans:       (a) No entry will be passed

74.  On the day of dissolution of the firm ‘Roop Brothers’, it had Partners’ capital amounting ₹ to ₹ 1,50,000, external liabilities ₹ 35,000, Cash balance ₹ 8,000 and Deferred Advertisement Expense A/c (Dr.) ₹ 7,000. If Realisation loss amounted to ₹ 25,000, the assets were sold at:

(a) ₹ 1,70,000                     (b) ₹ 1,45,000

(c) ₹ 1,85,000                     (d) ₹ 15,000

Ans:       (b) ₹ 1,45,000

 

75. If interest on capital is allowed to the partners irrespective of profit earned or loss suffered by the firm, such interest is treated as

(a) loss of the firm                           (b) an appropriation of profit

(c) a charge against profit             (d) profit of the firm

Ans:       (c)

76. Sandeep, a partner in a firm, withdrew ₹ 10,000 in the end of each quarter for nine months ending 31st December, 2018. Assuming that the firm is following calendar year. Interest on drawings will be calculated for an average period of

(a) 3 months                      (b) 6 months

(c) 9 months                       (d) 12 months

Ans:       (a) 3 months

77. In a firm of three partners A, B and C, C has been given a guarantee of minimum profit of ₹ 8,000 by the firm. Firm suffered a loss of ₹ 5,000 during the year. Capital accounts of A and B will be debited by

(a) ₹ 6,500 each                 (b) ₹ 4,000 each

(c) ₹ 2,500 each                 (d) ₹ 1,500 each

Ans:       (a) ₹ 6,500 each

78. A partner advanced loan of ₹ 40,000 to the firm on December 31, 2018. Firm suffers a loss of ₹1,000 during the year ending March, 2019. In the absence of partnership deed interest on loan allowed to the partner will be

(a) ₹ 2400                            (b) Nil

(c) ₹ 1,200                           (d) ₹ 600

Ans:       (d) ₹ 600

 

79. Capital employed in a business is ₹ 2,00,000. The normal rate of return on capital employed is 15%. During the year, the firm earned a profit of ₹ 48,000. Calculate goodwill on the basis of 3 years purchase of super profit.

(a) ₹ 50,000                         (b) ₹ 60,000

(c) ₹ 52,000                         (d) ₹ 54,000

Ans:       (d) ₹ 54,000

80. The value of furniture given in the old Balance Sheet was ₹ 66,000 which was overvalued by 10%. The effect of the above transaction in the Revaluation A/c will be:

(a) ₹ 6,000 will be debited to Revaluation A/c

(b) ₹ 6,600 will be debited to Revaluation A/c

(c) ₹ 6,000 will be credited to Revaluation A/c

(d) ₹ 6,600 will be credited to Revaluation A/c

Ans:       (a) ₹ 6,000 will be debited to Revaluation A/c

 

81. A and B share profits in the ratio of 4 : 1. C is admitted for 1/6th share for which he pays ₹ 20,000 for goodwill. New profit sharing ratio is 3 : 2 : 1. Journal entry for treatment of goodwill will be:

(a) Premium A/c               Dr.          ₹ 20,000              

A’s Capital A/c   Dr.          ₹ 16,000              

To B’s Capital A/c                                             ₹ 36,000

(b) Premium A/c              Dr.          ₹ 20,000              

To A’s Capital A/c                                             ₹ 16,000

To B’s Capital A/c                                             ₹ 4,000

(c) Premium A/c               Dr.          ₹ 20,000              

B’s Capital A /c  Dr.          ₹ 16,000              

To A’s Capital A/c                                             ₹ 36,000

(d) Premium A/c              Dr.          ₹ 20,000              

To A’s Capital A/c                                             ₹ 14,000

To B’s Capital A/c                                             ₹ 6,000

Ans:       (c)  Premium A/c              Dr.          ₹ 20,000              

B’s Capital A /c  Dr.          ₹ 16,000              

To A’s Capital A/c                                             ₹ 36,000

82. How do you treat accumulated reserves and surplus in case of admission of a partner when old partners decide to record them at their old figures in the new Balance sheet.

(a) Debit old partners capital account and credit reserve account

(b) Debit reserve account and credit old partners capital account

(c) Gaining partner’s capital A/c debited and sacrificing partner’s capital A/c credited.

(d) No adjustment is required.

Ans:       (c) Gaining partner’s capital A/c debited and sacrificing partner’s capital A/c credited.

 

83. A, B and C sharing profits and losses in the ratio of 4 : 3 : 2, decided to share the future profits and losses in the ratio of 2 : 3 : 4 with effect from 1st April, 2019. An extract of their Balance Sheet as at 31st March, 2019 is:           

Liabilities                                                              (₹)                          Assets                   (₹)

Workmen Compensation Reserve           65,000                  

How much amount will be debited to revaluation account, if claim on account of workmen estimated at ₹ 69,000.

(a) ₹ 69,000                         (b) 4,000

(c) ₹ 65,000                         (d) none of the above.

Ans:       (b) ₹ 4,000

84. Karan, Gunisha and Jagriti were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. On 31st March, 2019, Karan retires and his balance of capital on that date was ₹ 1,00,000; P&L A/c (Cr. Balance) ₹ 60,000; Revaluation loss ₹ 30,000. All partners decided to pay ₹ 1,75,000 to Karan on his retirement. His share of goodwill in the above case should be:

(a) ₹ 60,000                         (b) ₹ 30,000

(c) ₹ 37,500                         (d) None of the above

Ans:       (a) ₹ 60,000

85. T, S and R are partners sharing profits and losses in the ratio of 2 : 2 : 1. S retires and he gives 40 % of his share in favour of T and remaining to R. New ratio will be

(a) 2 : 1                                 (b) 17 : 8

(c) 14 : 11                             (d) None of the above

Ans:       (c) 14 : 11            

 

86. Kiran, Umesh and Aditya were in the partnership firm. Suddenly on October 31, 2017, Kiran died. Amount payable to her on that date amounted to ₹ 1,05,000. ₹ 5,000 was paid immediately and balance was paid in 4 equal annual installments along with the interest @ 12 % p.a. starting from 31st October, 2018. Calculate the interest due as on 31st March, 2019. Financial year was followed as the accounting year, by the firm.

(a) ₹ 2,500           (b) ₹ 3,000

`               (c) ₹ 4,500           (d) ₹ 3,750

Ans:       (d) ₹ 3,750

87. Karan, Aman and Girish were partners with capitals of ₹ 3,00,000 ; ₹ 2,50,000 and ₹ 2,00,000 respectively as on 31st March, 2019. Aman died, partners decided to pay the entire amount to Aman’s Executor. But they only had ₹ 50,000 cash and rest of the amount was to be brought in by Karan and Girish in such a way that their future capital will be equal. Calculate the amount to be brought in by Karan and Girish.

(a) ₹ 50,000 by Karan and ₹ 1,50,000 by Girish.

(b) ₹ 50,000 by Girish and ₹ 1,50,000 by Karan.

(c) ₹ 25,000 by Karan and ₹ 1,25,000 by Girish.

(d) ₹ 1,25,000 by Karan and ₹ 25,000 by Girish.

Ans:       (a) ₹ 50,000 by Karan and ₹ 1,50,000 by Girish.

88. Raman, Devika and Amrish were partners sharing profits and losses in the ratio of 3 : 2 : 1. Amrish died on 12th June, 2019. On the death of a partner, it is decided to value the goodwill at three years purchase of average profit of last three years. Profits of previous years are as under:

2014-15 ₹ 70,000

2015-16 ₹ 65,000

2016-17 (₹ 15,000)

2017-18 ₹ 80,000

2018-19 ₹ 70,000

Calculate the amount of goodwill to be credited to Amrish’s Capital A/c.

(a) ₹ 22,500                         (b) ₹ 25,000

(c) ₹ 1,35,000                     (d) ₹ 1,50,000

Ans:       (a) ₹ 22,500        

89. Realisation expenses of ₹ 10,000 were to be borne by Mishika, a partner. However it was paid by Medha. While passing the entry—will be debited.

(a) Realisation account                  (b) Mishika’s capital account

(c) Medha’s capital account         (d) Bank account

Ans:       (b) Mishika’s capital account

 

 90. A creditor of ₹ 30,000 took stock of ₹ 35,000 for settlement of his claim.

What amount will be credited to Realisation account :

(a) ₹ 5,000                           (b) ₹ 35,000

(c) Zero                                 (d) ₹ 30,000

Ans:       (c) Zero

 

91. C was being guaranteed that his share of Profits will not be less than ₹ 40,000 p.a. Deficiency if any, was to be borne by A and B equally. For the year ended 31st March, 2019 the firm incurred loss of ₹ 1,20,000. What amount will be debited to A’s Capital Account in total at the end of the year?

(a) ₹ 60,000                         (b) ₹ 80,000

(c) ₹ 90,000                         (d) ₹ 30,000

Ans:       (b) ₹ 80,000

 

 

92. Rahu, Shani, and Kaal are partners sharing Profits and Losses in the ratio 5 : 3 : 2. Rahu had drawn ₹ 10,000 at the beginning of every month, Shani had drawn ₹ 30,000 at the beginning of every quarter, Kaal had drawn ₹ 1,20,000 during the year. Interest on drawings was to be charged @10% p.a. who will be charged with highest Interest on drawings ?

(a) Rahu                               (b) Shani

(c) Kaal                                 (d) Equal Interest on Drawings for all

Ans:       (b) Shani

 

93. Pick the odd one out.

(a) Rent to Partner                          (b) Manager’s Commission

(c) Interest on Partner’s Loan (d) Interest on Partner’s Capital

Ans:       (d) Interest on Partner’s Capital

 

94. The clauses of Partnership Deed can be altered with

(a) Consent of all the Partners

(b) Consent of Majority of Partners

(c) Even if any partner wants for the same

(d) Can be altered at regular intervals

Ans:       (a) Consent of all the Partners

 

95. A and B were partners in a firm. They admitted C as a new partner and new profit sharing ratio between the three partners is decided as 1 : 2 : 2. If the sacrificing ratio is 4 : 1. Calculate Old Profit sharing ratio.

(a) 1 : 1                                 (b) 13 : 12

(c) 3 : 2                                  (d) 5 : 3

Ans:       (b) 13 : 12

 

96. Realisation Expenses were to be borne by A for which he was to get credit of ₹ 10,000. Actual realisation expenses amounted to ₹ 12,000 which were paid out of firm’s Bank Account. What entry/entries will be passed?

(a) Realisation A/c           Dr.          ₹ 22,000              

To Cash A/c                                        ₹ 12,000

To A’s Capital A/c                                             ₹ 10,000

(b) (i) Realisation A/c      Dr.          ₹ 12,000              

To Cash A/c                                        ₹ 12,000

 (ii) A’s Capital A/c            Dr.          ₹ 10,000              

To Realisation                                    ₹ 10,000

(c) Realisation A/c            Dr.          ₹ 2,000 

To A’s Capital A/c                                             ₹ 2,000

(d) (i) Realisation A/c      Dr.          ₹ 10,000              

To A’s Capital A/c                                             ₹ 10,000

(ii) A’s Capital A/c             Dr.          ₹ 12,000              

To Cash A/c                                        ₹ 12,000

Ans:       (d) i) Realisation A/c       Dr.          ₹ 10,000              

To A’s Capital A/c                                             ₹ 10,000

(ii) A’s Capital A/c             Dr.          ₹ 12,000              

To Cash A/c                                        ₹ 12,000

97. Ram and Shyam are partners in a firm sharing PandL in the ratio 3 : 2. They admitted Mohan as a new partner for 1/4th share. Goodwill was valued at

₹ 80,000. Mohan brought his share of goodwill in cash and was credited to partner’s Capital Account. Ram withdrew half of his goodwill share i.e

₹ 4,000 from his account. Calculate Sacrificing Ratio.

(a) 2 : 3                                 (b) 3 : 2

(c) 1 : 1                                  (d) Incomplete Information

Ans:       (a) 2 : 3

98. The Capital balances of A and B after all adjustments related to Goodwill premium, Revaluation Gain/Loss and Accumulated profits/Losses were

₹ 3,60,000 and ₹ 4,40,000. According to agreement, C a new partner will bring 20% of combined  

(a) ₹ 1,60,000                     (b) ₹ 2,00,000

(c) ₹ 16,000                         (d) ₹ 20,000

Ans:       (a) ₹ 1,60,000

99. A and B are partners sharing profits and losses in the ratio 3 : 2. Their capitals as on 31st March 2019 after adjustment of interest on capital and profits for the year were ₹ 1,40,000 and ₹ 1,08,000 respectively. Interest on capital credited to them @10%. Profit for the year after interest provided on capital was 50,000. How much Interest on Capital was credited to A and B?

(a) A ₹ 10,000 and B ₹ 8,000.

 (b) A ₹ 11,000 and B ₹ 8,800.

 (c) A ₹ 14,000 and B ₹ 10,800

 (d) A ₹ 17,000 and B ₹ 12,800.

Ans:       (a) A ₹ 10,000 and B ₹ 8,000.

 

100.        On the basis of the following data how much final payment will be made to a partner on firm’s dissolution? Credit balance of the capital account

₹ 50,000. Share of loss on realization ₹ 10,000 Firm’s liability taken over

by him for ₹ 8,000.

(a) ₹ 32,000                         (b) ₹ 48,000

(c) ₹ 40,000                         (d) ₹ 52,000

Ans:       (b) ₹ 48,000

 

101. Sid, Kid and Rid were partners sharing P&L in the ratio 3 : 2 : 1. Kid retires and sold his share for ₹ 80,000 being paid as ₹ 20,000 by Sid and ₹ 60,000 by Rid. What will be the new Profit Sharing Ratio of Sid and Rid?

(a) 1 : 3                                 (b) 1 : 1

(c) 7 : 5                                  (d) 3 : 1

Ans:       (c) 7 : 5 

102. Goodwill of a firm was ₹ 2,00,000 valued by Capitalisation of Super Profit Method. If Normal rate of return is 10% and average profits made by firm were ₹ 2,50,000 (including abnormal loss of ₹ 30,000 on an average basis). What will be the Capital Employed?

(a) ₹ 2,00,000                     (b) ₹ 26,00,000

(c) ₹ 22,00,000                   (d) ₹ 20,00,000

Ans:       (b) ₹ 26,00,000

103.        P, Q and R are partners sharing Profits and Losses in the ratio 1/2; 3/10 and 1/5 respectively. Q retired and his share after Revaluation Gain, Accumulated Profits and Losses amounted to ₹ 5,60,000. He was paid ₹ 7,00,000 in full settlement. Pass necessary entry for treatment of Goodwill.

(a) No entry for Goodwill

(b) P’s Capital    Dr.          5,00,000              

R’s Capital           Dr.          2,00,000              

To Q’s Capital                                     7,00,000

(c) P’s Capital     Dr.          4,00,000              

R’s Capital           Dr.          1,60,000              

To Q’s Capital                                     5,60,000

(d) P’s Capital    Dr.          1,00,000              

R’s Capital           Dr.          40,000  

To Q’s Capital                                     1,40,000

Ans:       (d) P’s Capital    Dr.          1,00,000              

R’s Capital           Dr.          40,000  

To Q’s Capital                                     1,40,000

 

104. A and B are partners sharing Profits and Losses in the ratio 3 : 2. They admit C as a new partner. C takes 1/4 of his share from A and B gives 3/16 from his share to C. What is the share of C?

(a) 1/4                                   (b) 1/16

(c) 1/6                                   (d) 3/16

Ans:       (a) 1/4  

 

105. In a partnership firm, in case of insufficient profit i.e. net profit less than the amount of interest on capital, the profits are apportioned

(a) In the profit sharing ratio       (b) In the ratio of capital

(c) Equally                                           (d) None of the above

Ans:       (b) In the ratio of capital

106. Read the following points:

(i) Guarantee given by firm to the partner

(ii) Guarantee given by partner to a partner.

(iii)Guarantee given by a partner to the firm

What is the correct sequence for the above points while preparing Profit and Loss App. A/c?

(a) (i) (ii) (iii)                       (b) (i) (iii) (ii)

(c) (iii) (i) (ii)                        (d) (iii) (ii) (i)

Ans:       (c) (iii) (i) (ii)       

 

107. Ram, Shyam and Mohan were partners sharing Profits and Losses equally. w.e.f. 1st April, they decided to change their profit sharing ratio. On that date, the Goodwill was valued at ₹ 6,00,000 and following entry was passed Ram’s Capital A/c          Dr.          ₹ 1,00,000

To Shyam’s Capital A/c  ₹ 20,000

To Mohan’s Capital A/c ₹ 80,000

What was their new Profit sharing ratio?

(a) 4 : 3 : 2            (b) 5 : 3 : 2

(c) 2 : 1 : 1            (d) Incomplete information

Ans:        (b) 5 : 3 : 2

 

108. Goodwill of the firm is valued at ₹ 90,000, being valued at 3 years’ purchase of Super Profits. If Capital Employed is ₹ 6,00,000 and Actual Profits are

₹ 1,80,000, what will be the Normal rate of Return?

                (a) 25%                                 (b) 15%

(c) 30%                                 (d) 45%

Ans:       (a) 25%

 

109. The value of the stock given in the old Balance Sheet was ₹ 33,000, which was found over valued by 10%. The effect of the above transaction in Revaluation Account will be:

(a) ₹ 3,000 will be debited to Revaluation A/c

(b) ₹ 3,300 will be debited to Revaluation A/c

(c) ₹ 3,000 will be credited to Revaluation A/c

(d) ₹ 3,300 will be credited to Revaluation A/c

Ans:       (a) ₹ 3,000 will be debited to Revaluation A/c

 

110.        Kamlesh, Lokesh and Mahesh are partners. The relative profit sharing ratio between Kamlesh and Lokesh is 3 : 2 and between Lokesh and Mahesh is also 3 : 2. Find out the profit sharing ratio between Kamlesh, Lokesh and Mahesh.

(a) 9 : 6 : 6                            (b) 9 : 6 : 3

(c) 9 : 6 : 2                            (d) 9 : 6 : 4

Ans:       (d) 9 : 6 : 4

 

111. G, K and B were partners sharing Profits and Losses in the ratio 7 : 5 : 4. K died and ₹ 20,000 was appearing on the credit side of his capital account, to be rendered to his executors. What is the possible reason out of the following for this amount?

(a) Interest on Capital    (b) Interest on Drawings

(c) Share in Accumulated Profits

 (d) Both (a) and (c)

Ans:       (d) Both (a) and (c)

               

112. At the time of dissolution of partnership firm, a creditor worth ₹ 20,000 took away stock worth ₹ 18,000 in full settlement. What entry will be passed to show this settlement?

(a) No entry be passed

(b) Realisation A/c debit and Cash A/c credit with ₹ 20,000

(c) Cash A/c debited and Realisation credited with ₹ 18,000

(d) Both (b) and (c)

 Ans:      (a) No entry be passed

113. What will be the amount of interest on drawings if a partner withdraws ₹ 6,000 at the end of every alternate month, first drawings being made on 31st May’ 2018. What will be Interest on Drawings for the year ending 31st March 2019 if rate of interest on drawings is @ 8% p.a.

(a) ₹ 1,320           (b) ₹ 1,200

(c) ₹ 2,640           (d) ₹ 480

Ans:       (b) ₹ 1,200

114. A, B and C are partners in a firm. Net profit before appropriations is ₹ 5,58,000. Total interest on capital and salary to the partners amounted to ₹ 60,000 and ₹ 1,20,000 respectively. A and C are entitled to get a commission 4% each on net profit after taking into consideration salaries, interest on capital and all commission. Calculate commission payable to A and C

(a) ₹ 15,120 each

(b) ₹ 14,000 each

(c) ₹ 14,538 to A and ₹ 13,979 to C

(d) ₹ 14,538 each

Ans:       (b) ₹ 14,000 each

 

115. A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. A’s capital is

₹ 50,000, B’s capital is ₹ 70,000 and C’s capital is ₹ 35,000. B retries from the firm and balance in Reserve on the date was ₹ 50,000. B took over stock of ₹ 10,000 at ₹ 17,500. The goodwill of the firm is ₹ 30,000, then amount payable to B on his retirement is:

(a) ₹ 95,000                         (b) ₹ 87,500

 (c) ₹ 1,05,000                    (d) ₹ 84,500

Ans:       (b) ₹ 87,500

116. In case of Dissolution of partnership firm, Workmen Compensation Reserve existing in the Balance Sheet is ₹ 16,000 and the claim against it is arrived at ₹ 20,000.

An amount of ............ (i)              for Workmen Compensation Reserve will be transferred to the ............ (ii) ............ side of ............ (iii)          Account?

(a) (i) ₹ 16,000 (ii) Credit (iii) Realisation

(b) (i) ₹ 20,000 (ii) Credit (iii) Realisation

(c) (i) ₹ 16,000 (ii) Credit (iii) Capital

(d) (i) ₹ 16,000 (ii) Debit (iii) Realisation

Ans:       (a) (i) ₹ 16,000 (ii) Credit (iii) Realisation

117. A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. General reserve existing in the Balance Sheet is ₹ 1,20,000. Partners want to change their profit sharing ratio to 1 : 1 : 1 and they want General Reserve in the new Balance Sheet to be shown at its existing value. For this gaining partner compensated the sacrificing partner (for General Reserve). In what ratio General Reserve will be distributed in future?

(a) Old Ratio                       (b) New Ratio

(c) Equally                           (d) Capital Ratio

Ans:       (b) New Ratio

 

118.        Match the following:

(i) Goodwill premium                     (a) Written off in Old Ratio

(ii) Revaluation Gain                       (b) Distributed in Old Ratio

(iii) Profits after admission           (c) Distributed in Sacrificing Ratio

(iv) Goodwill in Books                    (d) Distributed in New Ratio

Choose the correct option:

(a) (i)–(d), (ii)–(c), (iii)–(b), (iv)–(a)

(b) (i)–(c), (ii)–(d), (iii)–(b), (iv)–(a)

(c) (i)–(a), (ii)–(b), (iii)–(c), (iv)–(d)

(d) (i)–(c), (ii)–(b), (iii)–(d), (iv)–(a)

Ans:      (d) (i)–(c), (ii)–(b), (iii)–(d), (iv)–(a)

 

119. X, Y and Z are partners sharing profits in the ratio of 5 : 4 : 3. Z died on 30th June, 2019. His share of Profits till date of death was based on turnover. Turnover for year ended 31st March 2018 was ₹ 25,00,000 and profits for the same period were ₹ 5,00,000. Z’s share of profits till date of his death were calculated at ₹ 60,000, what was the turnover till 30th June, 2019?

 (a) ₹ 12,00,000                  (b) ₹ 3,00,000

(c) ₹ 6,25,000                     (d) None of the above

Ans:       (a) ₹ 12,00,000