Admission of a Partner Test

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Admission of a Partner Test - 1

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Question 1
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Why a new partner is admitted in the firm?

A
To Increase the Number of partners

B
To Increase the Capital of the firm.

C
To increase the goodwill of the firm

D
To Increase the Profit sharing Ratio

Solution

Explanation:

The main purpose of admission of a new partner is to increase the capital of the firm. When old partners feel that the capital they have employed in the business is not enough for the future growth of the business. They may admit a new partner to maintain or to build up the financial strength of the business.
Question 2
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Out of the following, which is the main right of a partner?

A
Right to Share the Profits of the firm.

B
Right to Say no for Goodwill

C
Right to Stop other partners for drawings

D
Right to share the old profits of the firm

Solution

Explanation:

When a new partner is admitted into a partnership business. He gets following rights:.Right to share future profits of the firm
New partner is not entitled to the profits and other incomes earned by a partnership business before his admission
Question 3
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According to Section 30 of Partnership Act 1932:

A
New partner is allowed to share old profits

B
New partner will inspect the books of accounts

C
New partner will bring capital and goodwill in cash

D
A Minor can be admitted as a partner by the consent of all partners for the time being.

Solution

Explanation:

As per the law a minor cannot be admitted in a ny contracts. But with the consent of all the existing partners as per section 30 of the partnership act a minor an be admitted into a partnership firm as a partner for the time being.
Question 4
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Goodwill Given in the old Balance Sheet will be:

A
Written off to the old partners

B
Credited to old Partners Capital accounts

C
Written off by the Sacrificing partners

D
Distributed by Gainer partners

Solution

Explanation:

Goodwill existing in the old balance sheet of a partnership firm before admitting a new partner will be written off to the capital accounts of the old partners in their old profit sharing ratio.
Question 5
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A and B are partners in a firm sharing profits in the ratio of 2 : 1. They admit C as a new partner for 1/5 share. New Ratio will be 8:4:3. Sacrificing ratio will be:

A
1 : 7

B
3 : 5

C
1 : 2

D
2 : 1

Solution

Explanation:

If C is admitted for 1/5th share then 1-1/5= 4/5th share is available for A and B which they share in the ratio of 2:1. So the new profit sharing ratio for A is = 4/5*2/3=8/15

For B new profit sharing ratio is 4/5*1/3=4/15. So New ratio is 8:4:3.

Sacrificing ratio= Old ratio- new ratio. For A Sacrificing ratio = 2/3-8/15=2/15 and For B Sacrificing ratio = 1/3-4/15 = 1/15.
Question 6
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A and B are partners in a firm sharing profits in the ratio of 5 : 3. They admit C as a new partner for 1/5 share. New Ratio will be 3 : 1 : 1. Sacrificing ratio will be:

A
2 : 1

B
1 : 7

C
1 : 2

D
5 : 3

Solution

Explanation:

OLD RATIO OF A AND B 5 : 3

NEW RATIO OF A , B AND C IS 3 : 1: 1

SACRIFICING RATIO OF A = 5/8-3/5 = 1 /40

SACRIFING RATIO OF B = 3 / 8 - 1 / 5 = 7 / 40

SACRIFICING RATIO OF A AND B = 1 : 7
Question 7
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A and B are partners in a firm sharing profits in the ratio of 4 : 3. They admit C as a new partner. New Ratio will be 2 : 3 : 1. Sacrificing ratio will be:

A
Only A is sacrificing

B
2 : 3

C
Only B is Sacrificing

D
4 : 3

Solution

Explanation:

Calculation of sacrificing ratio of partners:
Old Ratio = 4:3
New Ratio = 2:3:1
Sacrificing Ratio = A : 4/7 – 2/6 = 10/42
B : 3/7 – 3/6 = 3/42 Gain
Question 8
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A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit C as a new partner for 1/4 share. New Ratio of A and B will be 2 : 1 . Sacrificing ratio will be:

A
2 : 1

B
3 : 2

C
1 : 1

D
2 : 3

Solution

Explanation:

Calculation of sacrificing ratio of partners:

Old Ratio = 3:2

New Ratio of A and B = 2:1

New Ratio of A, B and C will be : 1 – 1/4 = 3/4

A’s new share = 2/3 × 3/4 = 6/12

B’s new share = 1/3 × 3/4 = 3/12

C’s Share 1/4 OR 3/12

New Ratio 6 : 3: 3 OR 2:1:1

Sacrificing Ratio = A : 3/5 – 2/4 = 2/20

B : 2/5 – 1/4 = 3/20
Question 9
1 / -0

A and B are partners in a firm sharing profits in the ratio of 5 : 3. They admit C as a new partner for 1/7 share. New Ratio will be 4 : 2 : 1. Sacrificing ratio will be:

A
5 : 3

B
4 : 2

C
3 : 2

D
3 : 5

Solution

Explanation:

Calculation of sacrificing ratio of partners:

Old Ratio = 5:3

New Ratio = 4:2:1

Sacrificing Ratio = A : 5/8 – 4/7 = 3/56

B : 3/8 – 2/7 = 5/56
Question 10
1 / -0

A and B are partners in a firm sharing profits in the ratio of 2 : 1. They admit C as a new partner for 1/5 share. New Ratio of A and B will be 1 : 2. Sacrificing ratio will be:

A
Sacrificing ratio 2 : 1

B
Sacrificing ratio 3 : 5

C
Sacrificing ratio 1 : 1

D
A’s Sacrifice 6/15 and B’s Gain 3/15

Solution

Explanation:

Calculation of sacrificing ratio of partners:

Old Ratio = 2:1

New Ratio of A and B = 1:2

New Ratio of A, B and C will be : 1 – 1/5 = 4/5

A’s new share = 1/3 × 4/5 = 4/15

B’s new share = 2/3 × 4/5 = 8/15

C’s Share 1/5 OR 3/15

New Ratio 4 : 8: 3

Sacrificing Ratio = A : 2/3 – 4/15= 6/15

B : 1/3 – 8/15 = 3/15 Gain

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 1

Result

Admission of a Partner Test - 1

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SHARING IS CARING

Question 1

To Increase the Number of partners

To Increase the Capital of the firm.

To increase the goodwill of the firm

To Increase the Profit sharing Ratio

Solution

Question 2

Right to Share the Profits of the firm.

Right to Say no for Goodwill

Right to Stop other partners for drawings

Right to share the old profits of the firm

Solution

Question 3

New partner is allowed to share old profits

New partner will inspect the books of accounts

New partner will bring capital and goodwill in cash

A Minor can be admitted as a partner by the consent of all partners for the time being.

Solution

Question 4

Written off to the old partners

Credited to old Partners Capital accounts

Written off by the Sacrificing partners

Distributed by Gainer partners

Solution

Question 5

1 : 7

3 : 5

1 : 2

2 : 1

Solution

Question 6

2 : 1

1 : 7

1 : 2

5 : 3

Solution

Question 7

Only A is sacrificing

2 : 3

Only B is Sacrificing

4 : 3

Solution

Question 8

2 : 1

3 : 2

1 : 1

2 : 3

Solution

Question 9

5 : 3

4 : 2

3 : 2

3 : 5

Solution

Question 10

Sacrificing ratio 2 : 1

Sacrificing ratio 3 : 5

Sacrificing ratio 1 : 1

A’s Sacrifice 6/15 and B’s Gain 3/15

Solution

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