Admission of a Partner Test

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Admission of a Partner Test - 22

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Weekly Quiz Competition

Question 1
1 / -0

Upon a admission of Champak Lal in a partnership firm as a new partner for 1/4th share of profit, the goodwill of the firm is valued at Rs.40,000. Goodwill to be brought in cash by Champak will be ______.

A
Rs.40,000

B
Rs.10,000

C
Rs.30,000

D
Rs.20,000

Solution

goodwill of firm is 40000
share of incoming partner=1/4
=40000*1/4
=10000
Question 2
1 / -0

As per AS 26 only _____will be recorded in books of account .

A
hidden goodwill

B
full goodwill

C
purchased goodwill

D
all of the above

Solution

As per 26 only purchase goodwill will be recorded in book of accounts When goodwill is purchase by the firm in a consideration in cash or kinds of cash it shown in the balance sheet
Question 3
1 / -0

Which of these is not found in case of retirement /death of a partner?

A
Revaluation A/c

B
Realization of assets

C
Distribution of goodwill

D
Gaining ratio

Solution

Realization of assets
Realization acccount is prepared at the time of dissolution of partnership firm. this account is opened to find out profit or loss on realization of assets and payment of liabilities.
Question 4
1 / -0

Goodwill brought in by a new partner is a _______.

A
tangible asset

B
fictitious asset

C
dummy asset

D
intangible but real asset
Question 5
1 / -0

X,Y and Z are three partners in a firm.They are sharing profit and loss in the ratio of 3:2:1. On 11th Jan Y died. The firm decided to value goodwill based on 3 years purchase of weighted average of 5 years profit. The trading profit of the firm for the pass five years before changing interest on capital was as under rs.10,000, Rs.9000,Rs.11000,Rs.7000, Rs.8000. The capital of the firm stood Rs.50,000 and Interest on capital is given at 8%.What is the total goodwill of the firm?

A
Rs.15,000

B
Rs.10,000

C
Rs.21,000

D
Rs.32,000
Question 6
1 / -0

Which of these terms is not true in respect of goodwill?

A
Real Assets

B
Intangible Assets

C
Fixed Assets

D
Fictitious Assets
Question 7
1 / -0

X,Y and Z are three partners in a firm. They are sharing profit and loss in the ratio of 2:2:1. Y retires from the firm on 31st March. The firm decided not to raise goodwill A/c in the books of a/c. What entry will be made for the treatment of goodwill at the time of retirement of Y?

A
Debit X and Z ,Credit Y (for share of Y in the gaining ratio)

B
Goodwill A/c Dr, Credit Y's Capital A/c

C
Goodwill A/c Dr,Credit X,Y and Z Capital A/c

D
Goodwill A/c Dr. Credit X and Z A/c

Solution

If goodwill is reputation of firm value in term of money if goodwill are raised in retirement then it will be debited,
but in case of firm decided to not raised then , entry is X capital a/c ....Dr
Z capital a/c.....Dr
To Y capital a/c.
Question 8
1 / -0

When goodwill is to be after the admission of a partner in which ratio it is transferred to capital account of the partners?

A
Sacrificing ratio

B
Equally

C
New profit sharing ratio

D
Old profit sharing ratio
Question 9
1 / -0

When goodwill is revalued at the time of admission of a partner, how goodwill is distributed amongst the old partners?

A
Equally.

B
Capital ratio.

C
Sacrifice ratio.

D
New profit sharing ratio.

Solution

In case of admission of a partner, goodwill cannot be raised in the books of the firm because in consideration in money or money;s worth is paid for it. If incoming partner brings any premium over and above his capital contribution at the time of his admission, such premium should be distributed to other existing partners. When a new partner is admitted to a firm, the old partner generally sacrifice in favour of the new partner in terms of lower profit sharing ratio in the future. Therefore, the premium for goodwill brought in by the new partner shall be given to the existing partners on the basis of profit sacrificing ratio.
Question 10
1 / -0

___________ is the real test of determination of partnership.

A
Mutual agent

B
Sharing of profit and loss

C
Registration

D
Liability

E
Partnership deed

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 22

Result

Admission of a Partner Test - 22

Score

-

Rank

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SHARING IS CARING

Question 1

Rs.40,000

Rs.10,000

Rs.30,000

Rs.20,000

Solution

Question 2

hidden goodwill

full goodwill

purchased goodwill

all of the above

Solution

Question 3

Revaluation A/c

Realization of assets

Distribution of goodwill

Gaining ratio

Solution

Question 4

tangible asset

fictitious asset

dummy asset

intangible but real asset

Question 5

Rs.15,000

Rs.10,000

Rs.21,000

Rs.32,000

Question 6

Real Assets

Intangible Assets

Fixed Assets

Fictitious Assets

Question 7

Debit X and Z ,Credit Y (for share of Y in the gaining ratio)

Goodwill A/c Dr, Credit Y's Capital A/c

Goodwill A/c Dr,Credit X,Y and Z Capital A/c

Goodwill A/c Dr. Credit X and Z A/c

Solution

Question 8

Sacrificing ratio

Equally

New profit sharing ratio

Old profit sharing ratio

Question 9

Equally.

Capital ratio.

Sacrifice ratio.

New profit sharing ratio.

Solution

Question 10

Mutual agent

Sharing of profit and loss

Registration

Liability

Partnership deed

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