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Retirement or Death of a partner Test - 25

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Retirement or Death of a partner Test - 25
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  • Question 1
    1 / -0
    Goodwill brought in by the incoming partner is shared by the old partners in _________
  • Question 2
    1 / -0
    Which of the following is an example of real asset
  • Question 3
    1 / -0
    Goodwill is______________.
    Solution

    Goodwill is an intangible asset that is associated with the purchase of one company by another. Because goodwill is not physical, such as a building or piece of equipment, it is considered to be an intangible asset. However, goodwill can be sold and purchased so it is not a fictitious asset.

  • Question 4
    1 / -0
    New incoming partner pays his share of goodwill in cash and profit sharing ratio of old partner is changed, Goodwill be distributed among old partners ____________.
    Solution
    According to section 32 of the Indian Partnership Act, 1932, when a new partner pays his share of goodwill in cash, then the profit sharing ratio changes. Hence, goodwill will be distributed among old partners at their old profit ratio only.
  • Question 5
    1 / -0
    Death of a partner has the effect of _________.
    Solution
    Retirement or death of a partner also leads to reconstitution of a partnership firm. On the retirement or death of a partner, the existing partnership deed comes to an end and in its place, a new partnership deed needs to be framed whereby, the remaining partners continue to do their business on changed terms and conditions.
    Business of a partnership firm may not come to an end due to the death of a partner. Other partners shall continue to run the business of the firm. For the purpose to run the business on partner's death the old deed will dissolve and the new deed will come into existence with new profit sharing ratio and other terms and conditions.
  • Question 6
    1 / -0
    X and Y are partners sharing profits in the ratio of 3 : 1. They admit Z as a partner who paid Rs.40,000Rs.40,000 as Goodwill, the new profit sharing ratio being 2: 1: 1 among X, Y and Z respectively. The amount of goodwill will be credited to __________.
    Solution
    Old ratio (X and Y) = 3 : 1 
    New ratio ( X, Y and Z) = 2 : 1 : 1
    Sacrificing ratio = Old ratio - New ratio
    X's sacrificing ratio = (3/4) - (2/4) = 1/4
    Y's sacrificing ratio = (1/4) - (1/4) = 0
    Therefore, the amount of goodwill will be credited to only sacrificing partner i.e., X 
  • Question 7
    1 / -0
    Amount spent on acquiring goodwill is a ____________.
  • Question 8
    1 / -0
    Which of these is not a method of treatment of goodwill?
  • Question 9
    1 / -0
    Premium method of goodwill valuation is generally followed in the event of
  • Question 10
    1 / -0
    A and B are two partners sharing profit and loss in the ratio of 2:32:3.C is admitted as a third partner for which he brings Rs. 6,0006,000 in cash as his share of goodwill, the partners decided to share profit and loss in the ratio of 4:6:64:6:6 in future. Find the sacrificing ratio.
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