Retirement or Death of a partner Test

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Retirement or Death of a partner Test - 4

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Weekly Quiz Competition

Question 1
1 / -0

Goodwill given in adjustments (after the balance sheet) will be ____________

A
Distributed among sacrificing partners

B
Distributed among all the partners

C
Distributed among the gaining partners

D
Used to adjusted the share of retiring partner

Solution

Goodwill given in outside the balance sheet (in adjustment) is used to calculate the share of outgoing partner only. This goodwill is self generated and should not be distributed or not to be shown in the books of accounts.
Question 2
1 / -0

L, M and N are partners sharing profit and losses in the ratio of 25:15:9 . M retires. It is decided that the profit sharing ratio between remaining partner will be the same as existing between M and N after the retirement of L. Calculate Gaining ratio

A
45:75

B
45:80

C
40:75

D
55:75

Solution

Old Share 25 : 15 : 9
L’s share = 25/29
Gain Ratio = 45: 75
Question 3
1 / -0

Other name for registered capital is:

A
reserve capital

B
Issued capital

C
nominal capital

D
None of the above.

Solution

nominal capital
Question 4
1 / -0

Treatment of General Reserve at the time of retirement is:

A
Debit the gainer partner

B
Debit side of Capital account of all the partners

C
Credit side of Capital account of all the partners

D
Only in Balance SheetAt the time of retirement of a partner, general reserve given in the balance sheet should be credited to all the partners (including outgoing partner) in their old profit sharing ratio.

Solution

At the time of retirement of a partner, general reserve given in the balance sheet should be credited to all the partners (including outgoing partner) in their old profit sharing ratio.

as it is similar to profit which is earned by the business with the help of all partner. so shared with all partners including old partner.
Question 5
1 / -0

Which of the following is not prepared at the time of retirement of a partner?

A
Balance Sheet

B
Profit and Loss Suspense Account

C
Revaluation Account

D
Partner’s capital account

Solution

Following accounts are prepared at the time of retirement of a partner except profit and loss suspense account:
•Revaluation Account
•Partner’s capital account
•Balance Sheet
Question 6
1 / -0

Which of the following item is not shown in the credit side of deceased partner’s capital account?

A
Share of reserve

B
Share of profit

C
Revaluation profit

D
Share of loss

Solution

Share of loss is not shown in the credit side it is shown in the debit side of deceased partner’s capital account. Following items are shown in the credit side of his account:
•Share of profit
•Revaluation profit
•Share of reserve
Question 7
1 / -0

When shares issued are 10,000 but applied shares are 8,000 then it is a case of:

A
pro-rata

B
Over-subscription

C
under subscription

D
None of the above

Solution

under subscription
Question 8
1 / -0

Bad debts recovered will be recorded in:

A
Cr. Side of partner’s capital A/c

B
Dr. Side of revaluation account

C
Dr. Side of partner’s capital A/c

D
Cr. Side of revaluation account

Solution

Bad debts recovered will be shown in the credit side of revaluation account and same will be added to cash in the balance sheet.

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Retirement or Death of a partner Test - 4

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Retirement or Death of a partner Test - 4

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SHARING IS CARING

Question 1

Distributed among sacrificing partners

Distributed among all the partners

Distributed among the gaining partners

Used to adjusted the share of retiring partner

Solution

Question 2

45:75

45:80

40:75

55:75

Solution

Question 3

reserve capital

Issued capital

nominal capital

None of the above.

Solution

Question 4

Debit the gainer partner

Debit side of Capital account of all the partners

Credit side of Capital account of all the partners

Only in Balance SheetAt the time of retirement of a partner, general reserve given in the balance sheet should be credited to all the partners (including outgoing partner) in their old profit sharing ratio.

Solution

Question 5

Balance Sheet

Profit and Loss Suspense Account

Revaluation Account

Partner’s capital account

Solution

Question 6

Share of reserve

Share of profit

Revaluation profit

Share of loss

Solution

Question 7

pro-rata

Over-subscription

under subscription

None of the above

Solution

Question 8

Cr. Side of partner’s capital A/c

Dr. Side of revaluation account

Dr. Side of partner’s capital A/c

Cr. Side of revaluation account

Solution

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