Admission of a Partner Test

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Admission of a Partner Test - 21

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Weekly Quiz Competition

Question 1
1 / -0

Profit or loss on revaluation of assets and liabilities is transferred to __________.

A
capital a/c of a new partner

B
capital a/c of all partner

C
capital a/c of old partner

D
capital a/c of senior partner

Solution

Due to the changes in revaluation account cause of profit and loss of assets and liabilities is transferred to the partners capital a/c of old partners .
Question 2
1 / -0

To which account is accumulated balances of profit and loss account and general reserve account are transferred at the time of admission of a partner?

A
Partners current capital A/c

B
Partners fixed capital A/c

C
Revaluation A/c

D
Profit and loss adjustment A/c

Solution

Partners current capital A/caccount is accumulated balances of profit and loss account and general reserve account are transferred at the time of admission of a partner. These balances are distributed to the old partners in the old ratio.
Question 3
1 / -0

Decreased in liability at the time of retirement of a partner is _________.

A
debited to revaluation A/c.

B
credited to revaluation A/c.

C
debited to profit and loss A/c.

D
debited to goodwill A/c.

Solution

At time of retirement of partner if liabilities are decreased or if asset increases then it is debited to Revaluation A/c.
Question 4
1 / -0

Decrease in assets at the time if retirement of a partner is ________.

A
credited to revaluation A/c.

B
debited to revaluation A/c.

C
debited to profit and loss A/c.

D
debited to goodwill A/c.

Solution

Revaluation account is a nominal account which is prepared at the time of admission, retirement or death of a partner to record change in the value of assets and liabilities. Decrease in the value of assets or increase in the value of liabilities is debited to this account and increase in the value of assets and decrease in the value of liabilites is credited to this account and profikt or loss is transferred to old partners capital account in their old profit sharing ratio.
Question 5
1 / -0

A company purchased a new Plant and Machinery worth $$RS. 1$$ crore from $$XYZ$$ Associates and issued him $$1100000$$ equity shares of $$Rs. 10$$ each. The excess of consideration over and above the purchase price will be treated as ___________.

A
goodwill

B
discount

C
premium

D
capital reserve
Question 6
1 / -0

How are unrecorded assets treated at the time of retirements of partners?

A
Debit to Revaluation A/c

B
Credited to Revaluation A/c

C
Credit to partners Capital A/c

D
Credited to capital A/c of retiring partners only

Solution

Any unrecorded assets are credited to revaluation a/c when treatments of retirement of partners.
Question 7
1 / -0

Increase in liability at the time of retirement of a partner is _________.

A
credited to revaluation A/c

B
debited to revaluation A/c

C
debited to profit and loss A/c

D
debited to goodwill A/c

Solution

Revaluation of assets and liabilities is essentially necessary at the time of reconstitution of the partnership be it admission or retirement of partnership. Net profit or loss on revaluation is then distributed among the partners. An increase in liability or decrease in assets will be debited to the revaluation account whereas a decrease in liabilities or increase in assets will be credited to the revaluation account.
Question 8
1 / -0

On death of a partner, the representative of the deceased partner are entitled to share profit from _________.

A
beginning of the financial year upto the date of death.

B
from date of death to the date of finalization of A/c.

C
for the full year.

D
for six month.
Question 9
1 / -0

___________ account is opened for revaluation of assets and liabilities at the time of admission of a partner into a firm.

A
Profit and loss A/c

B
Revaluation A/c

C
Realization A/c

D
Profit and loss appropriation A/c

Solution

Revaluation A/c account is opened for revaluation of assets and liabilities at the time of admission of a partner into a firm.
Revaluation account is also called Profit and loss adjustment account. It is a nominal account. Revaluation account is credited with increase in value of assets and decrease in the value of liabilities
Question 10
1 / -0

The amount which a new partner pays for the sacrifice made by other partners is called _______.

A
capital reserve

B
goodwill

C
reserve capital

D
reserve

Solution

At the time of admission of new partner, old partners sacrifices some of their profit share. To compensate old partners, new partner is liable to bring in goodwill either in cash or kind which is distributed among old partners in their sacrificing ratio.
The necessary journal entry will be:
1. Bank/Cash A/c Dr.
To Goodwill A/c
2. Goodwill A/c Dr.
To Old partner's capital A/c (Individually in their sacrificing ratio)

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 21

Result

Admission of a Partner Test - 21

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Rank

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SHARING IS CARING

Question 1

capital a/c of a new partner

capital a/c of all partner

capital a/c of old partner

capital a/c of senior partner

Solution

Question 2

Partners current capital A/c

Partners fixed capital A/c

Revaluation A/c

Profit and loss adjustment A/c

Solution

Question 3

debited to revaluation A/c.

credited to revaluation A/c.

debited to profit and loss A/c.

debited to goodwill A/c.

Solution

Question 4

credited to revaluation A/c.

debited to revaluation A/c.

debited to profit and loss A/c.

debited to goodwill A/c.

Solution

Question 5

goodwill

discount

premium

capital reserve

Question 6

Debit to Revaluation A/c

Credited to Revaluation A/c

Credit to partners Capital A/c

Credited to capital A/c of retiring partners only

Solution

Question 7

credited to revaluation A/c

debited to revaluation A/c

debited to profit and loss A/c

debited to goodwill A/c

Solution

Question 8

beginning of the financial year upto the date of death.

from date of death to the date of finalization of A/c.

for the full year.

for six month.

Question 9

Profit and loss A/c

Revaluation A/c

Realization A/c

Profit and loss appropriation A/c

Solution

Question 10

capital reserve

goodwill

reserve capital

reserve

Solution

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