Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 19

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Weekly Quiz Competition

Question 1
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 2
1 / -0

When a partner retires, his share of profit is __________.

A
shared by other partner(s).

B
given to his legal successors.

C
vested in the partner.

D
vests with the official liquidator.

Solution

If the partner are retire , but profit share by other partner retire partner are liable to share such profit because of partners is liable to share future profit earn by partner of firm.
Question 3
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 4
1 / -0

P, Q and R are three partners in a partnership firm X retirement stock, Sunday debtors and provision for bad debts stand in the books of A/c at Rs. 50,000,Rs.45000 and Rs.4500 respectively. The partners decided to revalue assets as under. Stock-in-trade to be reduced to 90%, provision for bad debts to be brought to 15% of Sundry debtors. The entry for revaluation of stock-in-trade will be ________.

A
Revaluations A/c Dr. Rs.5000,Stock in trade credit by Rs.5000.

B
Profit and loss A/c Dr. Rs.5000,Stock in trade credit by Rs.5000

C
Partners Capital A/c Rs.5000 to revaluation A/c Rs.5000

D
Revaluation A/c Rs.45000, stock-in-trade Cr. Rs.45000.

Solution

Revaluation account is an account prepare at the time of retirement or death of a partner. In this account, increase in value of assets or decrease in liabilities is recorded at credit side and decrease in value of asset and increase in liabilities recorded at debit side. Difference between both sides is calculated and transfer to partner's capital account.
In the given question, revaluation of stock will be journalized as follows:
Revaluation A/c Dr. 5000
To Stock in trade A/c 5000
(being value of stock-in-trade decreased by 10%)
Question 5
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 6
1 / -0

A,B, C and D are four partners in a firm sharing profits and loss in the ratio of 18:15:18:3, D retires from the firm and his share of profit is purchased by the remaining partners A,B and C as 1/54,1/54 and 1/54.
What is the gaining ratio remaining partners?

A
1:1:1

B
3:9:1

C
1:9:3

D
3:1:9

Solution

Gaining ratio is the ratio in which the remaining partner acquire the outgoing partner's share. In this, D's share is 3/54 which the remaining partners acquiring equally. i.e.1/54, 1/54 and 1/54. So their gaining ratio is 1:1:1.
Question 7
1 / -0

Profit or loss on revaluation of assets and liabilities is distributed in the __________ ratio.

A
Gaining

B
Sacrificing

C
Old profit sharing

D
New profit sharing

Solution

The balance of profit and loss on revaluation account of assets and liabilities are transferred to old partners capital account in the old profit sharing ratio.
Question 8
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 9
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 10
1 / -0

Gain Ratio is _______.

A
old profit sharing ratio - new profit sharing ratio

B
old profit sharing ratio

C
new profit sharing ratio

D
new profit sharing ratio - old profit sharing ratio

Solution

Gaining ratio means the ratio in which retiring partner's share among continuing partners is called as gaining ratio

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Re-Attempt Weekly Quiz Competition

Retirement or Death of a partner Test - 19

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Retirement or Death of a partner Test - 19

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Rank

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SHARING IS CARING

Question 1

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 2

shared by other partner(s).

given to his legal successors.

vested in the partner.

vests with the official liquidator.

Solution

Question 3

Profit and loss A/c

Revaluation A/c

Realization A/c

Profit and loss appropriation A/c

Solution

Question 4

Revaluations A/c Dr. Rs.5000,Stock in trade credit by Rs.5000.

Profit and loss A/c Dr. Rs.5000,Stock in trade credit by Rs.5000

Partners Capital A/c Rs.5000 to revaluation A/c Rs.5000

Revaluation A/c Rs.45000, stock-in-trade Cr. Rs.45000.

Solution

Question 5

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 6

1:1:1

3:9:1

1:9:3

3:1:9

Solution

Question 7

Gaining

Sacrificing

Old profit sharing

New profit sharing

Solution

Question 8

debited to revaluation A/c.

credited to revaluation A/c.

debited to profit and loss A/c.

debited to goodwill A/c.

Solution

Question 9

credited to revaluation A/c.

debited to revaluation A/c.

debited to profit and loss A/c.

debited to goodwill A/c.

Solution

Question 10

old profit sharing ratio - new profit sharing ratio

old profit sharing ratio

new profit sharing ratio

new profit sharing ratio - old profit sharing ratio

Solution

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