Admission of a Partner Test

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Admission of a Partner Test - 20

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Weekly Quiz Competition

Question 1
1 / -0

Money value of the reputation of business is known as ______.

A
Copyright

B
Goodwill

C
Patents

D
Trademark

Solution

Business goodwill is a key intangible asset that represents the portion of the business value that cannot be attributed to other business assets. The value of a company brand name, solid customer relations, good employee relations represent goodwill.
Question 2
1 / -0

When a new partner is admitted into a firm, which of these is not required ______________.

A
Public notice of admission of a new partner

B
Distribution of existing reserve and funds

C
Revaluation of assets and liabilities

D
Revaluation of goodwill of the firm

Solution

A public notice is not required in case of admission of new partner/s. However, in the following cases public notice is required:
1. Minor to be / not be a partner in the partnership firm
2. Dissolution of firm
3. Retirement of a partner from the firm.
Question 3
1 / -0

A new partner can be admitted only with the __________.

A
Majority decision

B
Unanimous decision of all the partners

C
Approval of registrar of firms

D
Consent of managing partner

Solution

Only a unanimous decision of all the partners can let the new partner in the firm.
As per the Indian partnership Act, 1932, it is imperative for all the partners to give their consent to introduce a new partner; which requires either making changes in the existing partnership deed or preparing a new deed altogether.
Question 4
1 / -0

Interest on capital allowed to a partner is debited __________.

A
Profit and Loss A/c

B
Revaluation A/c

C
Profit and Loss Appropriation A/c

D
General reserve A/c
Question 5
1 / -0

Monetary value of business reputation is called _______.

A
Liability

B
Goodwill

C
Premises

D
Bank balance

Solution

Over the time, a well-established business develops an advantage of good name, reputation and wide business connections. This helps the business to earn more profits as compared to a newly set up business. In accounting, the monetary value of such advantage is known as "goodwill". It is regarded as an intangible asset.
Question 6
1 / -0

P and Q are two partners sharing profit and loss equally. P draws Rs. 2,000 at the end of each month for 6 months whereas Q draws Rs. 4,000 at the beginning of each month for six months. Assuming that interest on drawing is to be charged @ 5% p.a interest on drawing of Q will be _____.

A
Rs. 350

B
Rs. 380

C
Rs. 410

D
Rs. 301
Question 7
1 / -0

Interest allowed on the capital of partner is charged to ________.

A
profit and loss A.c

B
profit and loss appropriation A/c

C
profit and loss adjustment

D
revaluation A/c
Question 8
1 / -0

Which of these statements is true?

A
Goodwill at the time of retirement of a partner is credited to remaining partner's capital A/c in sacrificing ratio.

B
Goodwill at the time retirement of a partner is credited to remaining partner's capital A/c in gaining ratio.

C
Goodwill at the time of retirement of a partner is debited to remaining partner's capital A/c in sacrificing ratio.

D
Goodwill at the time of retirement of a partner to the extent of retiring partner's share is debited to remaining partner's capital A/c in gaining ratio.

Solution

The valuation of goodwill at time of retiring in gaining ratio and retiring partner's is debited to partner's capital account.
Question 9
1 / -0

A new partner, along with other partners get ____________.

A
right to share future profit of the firm

B
right to share future assets of the firm

C
both (a) and (b)

D
either (a) or (b)
Question 10
1 / -0

On admission of A, a new partner, the value of closing stock was brought down by Rs.6,500. The revaluation a/c will be ______.

A
Debited by Rs. 6000

B
Debited by Rs. 6500

C
Debited by Rs. 650

D
Debited by Rs. 655

Solution

On admission of A new partner,
If there is a decrease in the closing stock by 6500.
Then, the Journal Entry in such case will be
Revaluation a/c Dr. 6500
To Stock a/c 6500

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 20

Result

Admission of a Partner Test - 20

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Rank

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SHARING IS CARING

Question 1

Copyright

Goodwill

Patents

Trademark

Solution

Question 2

Public notice of admission of a new partner

Distribution of existing reserve and funds

Revaluation of assets and liabilities

Revaluation of goodwill of the firm

Solution

Question 3

Majority decision

Unanimous decision of all the partners

Approval of registrar of firms

Consent of managing partner

Solution

Question 4

Profit and Loss A/c

Revaluation A/c

Profit and Loss Appropriation A/c

General reserve A/c

Question 5

Liability

Goodwill

Premises

Bank balance

Solution

Question 6

Rs. 350

Rs. 380

Rs. 410

Rs. 301

Question 7

profit and loss A.c

profit and loss appropriation A/c

profit and loss adjustment

revaluation A/c

Question 8

Goodwill at the time of retirement of a partner is credited to remaining partner's capital A/c in sacrificing ratio.

Goodwill at the time retirement of a partner is credited to remaining partner's capital A/c in gaining ratio.

Goodwill at the time of retirement of a partner is debited to remaining partner's capital A/c in sacrificing ratio.

Goodwill at the time of retirement of a partner to the extent of retiring partner's share is debited to remaining partner's capital A/c in gaining ratio.

Solution

Question 9

right to share future profit of the firm

right to share future assets of the firm

both (a) and (b)

either (a) or (b)

Question 10

Debited by Rs. 6000

Debited by Rs. 6500

Debited by Rs. 650

Debited by Rs. 655

Solution

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