Admission of a Partner Test

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Admission of a Partner Test - 10

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Weekly Quiz Competition

Question 1
1 / -0

If goodwill already existing in the --------, it should be written off by debiting old partners in their old profit sharing ratio

A
Balance sheet

B
Trading account

C
Trial Balance

D
Profit and loss account

Solution

The goodwill already existing in the balance sheet of the old firm should be written off and transferred to the old partners capital account in the old ratio.
Question 2
1 / -0

Revaluation Account is also known as ________

A
Profit and Loss Appropriation Account

B
Asset Account

C
Profit and Loss Account

D
Profit and Loss Adjustment Account

Solution

Revaluation account is also known as profit and loss adjustment account because it is concerned with the profit and loss on the revaluation of assets and re-assessment of liabilities.
Question 3
1 / -0

Being Chander brought rs 20000 for his share of goodwill. Which account should be debited?

A
Goodwill A/c

B
Profit and Loss A/c

C
Partner’s capital account

D
Cash/Bank A/c

Solution

When a new partner is admitted and he brings his share of goodwill (premium for goodwill) in cash, in such a case Cash or Bank account should be debited and Premium for goodwill account should be credited.
Question 4
1 / -0

At the time of increase in the value of assets which account should be debited while preparing Revaluation Account?

A
Asset A/c

B
Realisation A/c

C
Partners’ Capital A/c

D
Revaluation A/c

Solution

At the time of preparation of Revaluation Account, increase in the value of asset is to be shown in the debit side of Revaluation Account. Hence, following entry will take place: Asset A/c Dr. To Revaluation Account
Question 5
1 / -0

Bad debts recovered from an old debtor of Rs.1,000. Which account will be effected by this transaction?

A
Revaluation A/c and Cash Account

B
Debtors A/c and Cash Account

C
Debtors A/c and Provision for bad debts A/c

D
Revaluation A/c and Debtors A/c

Solution

Amount of bad debts recovered will not affect the debtors’ accounts because bad debts amount is already adjusted. Any amount recovered from the debtor in connection with bad debts will effect Revaluation account and cash/bank account.
Question 6
1 / -0

Revaluation account is not prepared at the time of _________________

A
Dissolution

B
Admission

C
Retirement

D
Death

Solution

Revaluation account is prepared at the time change in existing profit sharing ratio, admission of a partner, retirement of a partner and death of a partner. But in case of dissolution revaluation account is not prepared.
Question 7
1 / -0

At the time of adjustment of capitals, In the absence of any contract surplus or deficiency should be adjusted in

A
Profit and Loss adjustment account

B
Both Cash/bank only and Transfer to current account

C
Cash/bank only

D
Transfer to current account

Solution

THE DIFFERENCE IN THE CAPITALS OF THE PARTNERS will be adjusted through cash or bank account when nothing is mentioned in the question about the adjustment of difference amount.
Question 8
1 / -0

A and B are partners in a firm. They admit C for 1/5th share. C is to contribute capital proportionate to his share in the firm The combined capital of A and B after all adjustment is Rs.36000.Find out the amount of capital to be contributed by C

A
₹7500

B
₹6000

C
₹8000

D
₹9000

Solution

Amount to be brought by C as his capital:
Remaining Share = 1 – 1/5 = 4/5
Reciprocal of remaining share = 5/4
C’s Capital = 36,000 × 5/4 × 1/5 = 9,000
Question 9
1 / -0

A and B sharing profits in ratio of 3:2 and their capital after adjustment is Rs.80000 and Rs.60000. They admit C who contributes Rs.35000 as capital for 1/5th share (which is acquired equally from A and B). Calculate amount to be brought by A at the time of adjustment of capitals on the basis of amount brought by C.

A
5500

B
6500

C
7500

D
8500

Solution

Amount to be brought by A:
Old Ratio = 3:2
New Ratio = 5:3:2
Total capital of the firm = 35,000 × 5/1 = 1,75,000
A’s new capital = 1,75,000 × 5/10 = 87,500
A will bring = 87,500 – 80,000 = 7,5000
Question 10
1 / -0

X and Y sharing profits in the ratio of 6:4 and their capitals after adjustment are Rs.1,60,000 and Rs.1,20,000. They admit Z who contributes Rs.70000 as capital for 1/5 th share (which is acquired equally from X and Y). Calculate amount to be brought or withdrawn by Y at the time of adjustment of capitals on the basis of amount brought by Z.

A
15,500

B
7,500

C
10,500

D
5000

Solution

Amount to be brought by B:
Old Ratio = 6:4
New Ratio = 5:3:2
Total capital of the firm = 70,000 × 5/1 = 3,50,000
Y’s new capital = 3,50,000 × 3/10 = 1,05,000

HIS ADJUSTED CAPITAL IS 120000

CASH TO BE WITHDRAWN IS 120000-105000= 15000

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 10

Result

Admission of a Partner Test - 10

Score

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Rank

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SHARING IS CARING

Question 1

Balance sheet

Trading account

Trial Balance

Profit and loss account

Solution

Question 2

Profit and Loss Appropriation Account

Asset Account

Profit and Loss Account

Profit and Loss Adjustment Account

Solution

Question 3

Goodwill A/c

Profit and Loss A/c

Partner’s capital account

Cash/Bank A/c

Solution

Question 4

Asset A/c

Realisation A/c

Partners’ Capital A/c

Revaluation A/c

Solution

Question 5

Revaluation A/c and Cash Account

Debtors A/c and Cash Account

Debtors A/c and Provision for bad debts A/c

Revaluation A/c and Debtors A/c

Solution

Question 6

Dissolution

Admission

Retirement

Death

Solution

Question 7

Profit and Loss adjustment account

Both Cash/bank only and Transfer to current account

Cash/bank only

Transfer to current account

Solution

Question 8

₹7500

₹6000

₹8000

₹9000

Solution

Question 9

5500

6500

7500

8500

Solution

Question 10

15,500

7,500

10,500

5000

Solution

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