Admission of a Partner Test

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Admission of a Partner Test - 72

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Weekly Quiz Competition

Question 1
1 / -0

Incoming partner may acquire his share from the old partners

(i) In their old profit sharing ratio

(ii) In a particular ratio

(iii) In particular fraction from some of the partners

In which of the above mentioned alternatives

A
Only i

B
Only i and ii

C
Only I and iii

D
All the three

Solution

A newly admitted partner may acquire his share of profit from one partner or two partners or from all partners in an agreed ratio. He may acquire his share in old ratio of the partners or in an agreed ratio for sacrifice.
Question 2
1 / -0

A & B are partners sharing profits in the ratio 1:1. C wants to join their firm as it enjoys a good reputation in the industry. A and B were initially reluctant to his admission but agreed to admit him for 1/5th share in profits. For this, they ask him to pay an unreasonable amount of goodwill in cash irrespective of his share in the profits. Otherwise he will not be admitted as a partner. What values are being overlooked by the firm at the time of C’s admission?

A
Dishonesty

B
Social responsibility

C
Respect for Professional ethics

D
Greediness

Solution

When a new partner is admitted into a partnership firm, he has to bring some amount (other than capital) as premium for goodwill. But old partners may exempt this amount and they may allow him to join without paying premium for goodwill. In this case C will bring his amount of goodwill but old partners have should have shown some respect towards profession.
Question 3
1 / -0

Ram and Shyam are partners in a firm sharing profits in the ratio of 3:2. They admit Ghanshyam as a partner. Ram Surrendered 1/4th of his share and Shyam 1/3rd of his share in favor of Ghanshyam. Find out the new ratio.

A
3:2:1

B
27:17:15

C
25:20:15

D
27:16:17

Solution

Calculation of new ratio:

Ram’s old Share 3/5 and Shyam’s old share 2/5

Share surrendered by Ram = 1/4th of 3/5 = 3/20

Ram’s new share = 3/5 -3/20 = 9/20

Share Surrender by Shyam = 1/3 of 2/5 = 2/15

Shyam’s new share = 2/5 – 2/15 = 4/15

New Ratio : 27:16:17
Question 4
1 / -0

Admission of a partner is one of the mode of reconstituting the firm under which

A
Old partnership ended and new one between all partner(excluding old partner) comes into existence

B
Old partnership ended and new one between all partner(including new partner) comes into existence

C
Old partnership ended and new one between all partner(excluding new partner) comes into existence

D
New partnership ended and old one between all partner(including new partner) comes into existence

Solution

Admission of a partner is one of the methods of reconstitution of a firm. It means, it is the end of old partnership and beginning of a new partnership between all the partners including the new partner.
Question 5
1 / -0

With the ___ into the firm number of partner increase

A
Retirement of new partner

B
Dissolution of a new partner

C
Death of new partner

D
Admission of a new partner

Solution

Number of partners in a firm will increase when a new partner is admitted i.e. old partners + new partner.
Question 6
1 / -0

According to Section 30 of Partnership Act 1932:

A
A Minor can be admitted as a partner by the consent of all partners for the time being.

B
New partner will inspect the books of accounts

C
New partner is allowed to share old profits

D
New partner will bring capital and goodwill in cash

Solution

As per the law a minor cannot be admitted in any contracts. But with the consent of all the existing partners as per section 30 of the partnership act a minor an be admitted into a partnership firm as a partner for the time being.
Question 7
1 / -0

New profit sharing ratio means

A
All partner(excluding old) share future profit and losses

B
Two partner(including new) share future profit and losses

C
All partner(including new) share future profit and losses in this new ratio

D
Partners will share future profits equally

Solution

New profit sharing ratio is fixed after the admission of the new partner. It is the ratio in which all the partners including the new partner share profits. It is the ratio of the reconstituted firm.
Question 8
1 / -0

Kamal and Rahul are partner’s in a firm sharing profits and losses in the ratio of 7:3.They admit Kaushal as a prtaner for 1/5th share.Kaushal acquires his share from Kamal and Rahul in the ratio of 3:2 . The goodwill of the firm has been valued at Rs.25000. Kaushal paid Rs.10000 privately to X and Y as his share of goodwill. What should be the journal entry

A

Rahul A/c Dr.
Kamal A/c Dr.
To Kaushal A/c

B

Kamal A/c Dr.
Cash A/c Dr.
To Goodwill A/c

C

Rahul A/c Dr.
Loan A/c Dr.
To Cash A/c

D
No entry will be passed

Solution

No need to pass any journal entry when a new partner pays his premium for goodwill amount privately to the sacrificing partners, it will not be recorded in the books of accounts.
Question 9
1 / -0

Amount brought by a new partner for his share in goodwill is known as _____

A
Premium

B
Will

C
Profit

D
Discount

Solution

When a new partners is admitted into the partnership he brings some amount in cash as his capital and some amount for his share in goodwill. The amount he brings for the share of goodwill is known as premium for goodwill.
Question 10
1 / -0

At the time of admission of a new partner, the new partner acquires his share from the old partners in the:

A
Sacrificing ratio

B
New Ratio

C
Old ratio

D
Gaining Ratio

Solution

When a new partner is admitted, old partners will sacrifice some share in favor of new partner, the share they sacrifice in favor of new partner is known as sacrifice share or sacrificing ratio of the old partners.

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 72

Result

Admission of a Partner Test - 72

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Rank

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SHARING IS CARING

Question 1

Only i

Only i and ii

Only I and iii

All the three

Solution

Question 2

Dishonesty

Social responsibility

Respect for Professional ethics

Greediness

Solution

Question 3

3:2:1

27:17:15

25:20:15

27:16:17

Solution

Question 4

Old partnership ended and new one between all partner(excluding old partner) comes into existence

Old partnership ended and new one between all partner(including new partner) comes into existence

Old partnership ended and new one between all partner(excluding new partner) comes into existence

New partnership ended and old one between all partner(including new partner) comes into existence

Solution

Question 5

Retirement of new partner

Dissolution of a new partner

Death of new partner

Admission of a new partner

Solution

Question 6

A Minor can be admitted as a partner by the consent of all partners for the time being.

New partner will inspect the books of accounts

New partner is allowed to share old profits

New partner will bring capital and goodwill in cash

Solution

Question 7

All partner(excluding old) share future profit and losses

Two partner(including new) share future profit and losses

All partner(including new) share future profit and losses in this new ratio

Partners will share future profits equally

Solution

Question 8

Rahul A/c Dr. Kamal A/c Dr. To Kaushal A/c

Kamal A/c Dr. Cash A/c Dr. To Goodwill A/c

Rahul A/c Dr. Loan A/c Dr. To Cash A/c

No entry will be passed

Solution

Question 9

Premium

Will

Profit

Discount

Solution

Question 10

Sacrificing ratio

New Ratio

Old ratio

Gaining Ratio

Solution

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Rahul A/c Dr.
Kamal A/c Dr.
To Kaushal A/c

Kamal A/c Dr.
Cash A/c Dr.
To Goodwill A/c

Rahul A/c Dr.
Loan A/c Dr.
To Cash A/c