Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 10

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Weekly Quiz Competition

Question 1
1 / -0

How can a partner get retirement from the partnership firm?

A
With the effect of agreement

B
When all existing partners agreed

C
When a new partner is admitted

D
Both When all existing partners agreed and With the effect of agreement

Solution

A partner can get retirement in the following ways:
(1) With the consent of all the partners
(2) Due to ill health
(3) Agreement/contract is over
(4) By giving notice
Question 2
1 / -0

Which of the following is calculated at the time of Retirement of a Partner?

A
Gaining Ratio

B
Sacrifice of Retiring Partner

C
Sacrifice of the employees

D
Old Ratio

Solution

At the time of retirement of death of a partner we need to calculate the gaining ratio of the existing partners. The main purpose of calculating gaining ratio is to adjust the share of goodwill at the time of retirement or death of a partner.
Question 3
1 / -0

Goodwill given in the balance sheet is debited to the partners at the time of retirement in:

A
Sacrificing Ratio

B
Gain Ratio

C
New Ratio

D
Old Ratio

Solution

At the time of retirement, goodwill given in the balance sheet should be debited to the partners in their old profit sharing ratio (including the outgoing partner).it is called writing off the goodwill.
Question 4
1 / -0

Why there is need to calculate New profit share ratio

A
To settle the loan amount due to outgoing partner

B
After retirement of a partner, there will be change in the continuing partners’ ratio.

C
After retirement of a partner, there is no change in the continuing partners’ ratio.

D
Both After retirement of a partner, there will be change in the continuing partners’ ratio. and After retirement of a partner, there is no change in the continuing partners’ ratio.

Solution

When a partner is retired from the firm, there will be change in the ratio of remaining partners because retiring partner will give his share to remaining partners. It is necessary to find out the new ratio of existing partners.
Question 5
1 / -0

X, Y and Z are partners sharing profits in the ratio of 1/2, 2/5 and 1/10. What will be the new ratio of X and Y after the retirement of Z.

A
4:5

B
3:2

C
5:4

D
1:1

Solution

After the retirement of Z, new ratio of X and Y will be 5:4.

By making the base equal of all partners ratio ,it will be:-

L.C.M will be 10.Hence, Ratio will be 5:4:1 and after retirement of z it will be 5:4.
Question 6
1 / -0

M, N and H are partners without partnership deed. M wants to get retired. The profit on revaluation on the date was ` 12000.and other partners N and H want to share this in the new ratio 3:2. M wants this to be shared equally How this profit should be shared

A
8000 equally between each partner

B
6000 equally between each partner

C
4000 equally between each partner

D
3000 equally between each partner

Solution

In the absence of partnership deed profit sharing ratio will be equal. In this case, M is right; profit should be shared equally among the partners i.e. 4,000 equally among all the partners.
Question 7
1 / -0

If any asset is taken over by a partner at the time of his retirement, how will you record it?

A
Revaluation Account

B
Dr. side of his capital account

C
Balance Sheet

D
Cr. Side of his capital account

Solution

Any asset taken by the partner will be shown in the debit side of his capital account. It means his capital account will be reduced by the same.
Question 8
1 / -0

Deceased partner’s share of profit is to be transferred to his account by:

A
P/L Appropriation A/c

B
P/L Suspense A/c

C
P/L Adjustment A/c

D
None of these

Solution

At the time of death of a partner, a temporary account is opened, which is known as Profit and loss suspense account. The main purpose of this account is to calculate and transfer the share of deceased partner to his account (up to the date of his death).
Question 9
1 / -0

Deceased partners share of profit is shown in :

A
Credit side of his capital account only

B
Credit side of his capital account and in the B/S liability side

C
Credit side of his capital account and in the B/S asset side

D
Debit side of his capital account only

Solution

The amount payable to deceased partner’s executor as profit (up to the date of death) will be transferred to the credit side of deceased partner’s capital account and same will be shown in the assets side of the balance sheet.
Question 10
1 / -0

Where will you record the loss (upto date of death) due to deceased partner?

A
Dr. side of his capital account

B
Balance sheet assets side

C
Realization account

D
Revaluation Account

Solution

The amount of loss due to the deceased partner (up to the date of his death) will be debited to his capital account and same will be shown in balance sheet asset side also as profit and loss suspense account.

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Retirement or Death of a partner Test - 10

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Retirement or Death of a partner Test - 10

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SHARING IS CARING

Question 1

With the effect of agreement

When all existing partners agreed

When a new partner is admitted

Both When all existing partners agreed and With the effect of agreement

Solution

Question 2

Gaining Ratio

Sacrifice of Retiring Partner

Sacrifice of the employees

Old Ratio

Solution

Question 3

Sacrificing Ratio

Gain Ratio

New Ratio

Old Ratio

Solution

Question 4

To settle the loan amount due to outgoing partner

After retirement of a partner, there will be change in the continuing partners’ ratio.

After retirement of a partner, there is no change in the continuing partners’ ratio.

Both After retirement of a partner, there will be change in the continuing partners’ ratio. and After retirement of a partner, there is no change in the continuing partners’ ratio.

Solution

Question 5

4:5

3:2

5:4

1:1

Solution

Question 6

8000 equally between each partner

6000 equally between each partner

4000 equally between each partner

3000 equally between each partner

Solution

Question 7

Revaluation Account

Dr. side of his capital account

Balance Sheet

Cr. Side of his capital account

Solution

Question 8

P/L Appropriation A/c

P/L Suspense A/c

P/L Adjustment A/c

None of these

Solution

Question 9

Credit side of his capital account only

Credit side of his capital account and in the B/S liability side

Credit side of his capital account and in the B/S asset side

Debit side of his capital account only

Solution

Question 10

Dr. side of his capital account

Balance sheet assets side

Realization account

Revaluation Account

Solution

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