A and B are partners. C is admitted with 1/5 share. C brings 7 1,20,000 as his share towards capital. The total net worth of the firm is :
1. ₹ 1,00,000
2. ₹ 4,00,000
3. ₹ 1,20,000
4.₹ 6,00,000
A and B share profits and losses in the ratio of 3 : 1.C is admitted into partnership for 1/4 share. The sacrificing ratio of A and B is :
1. Equal
2.3 : 1
3. 2 : 1
4.3 : 2
A and B share profits and losses in the ratio of 3:4. C was admitted for 1/5 th share. New profit sharing ratio will be:
1.3 : 4 : 1
2. 12 : 16 : 7
3. 16 : 12 : 7
4. None of these
A, B and C are equal partners. D is admitted to the firm for non-ourth share. D brings ₹ 20,000 as capital and ₹ 5,000 being half of the premium for goodwill. The value of goodwill of the firm is :
1.₹ 10,000
2. ₹ 40,000
3.₹ 30,000
4. None of these
A, B and C are partners in a firm, if D is admitted as a new partner:
1. Old firm is dissolved
2. Old firm and old partnership are dissolved
3.Old partnership is reconstituted
4. None of these
A, B, C and D are partners sharing their profits and losses equally. They change their profit sharing ratio to 2:2:1:1. How much will C sacrifice ?
1.1/6
2. 1/12
3. 1/24
4.None of these
An asset which is not ficitious but intangible in nature, having realisable value is :
1.Machinery
2. Building
3. Furniture
4.Goodwill
At the time of admission of a new partner, General Reserve a appearing in the old Balances Sheet is transferred to:
1.All Partner’s Capital Accounts .
2.New Partners’ Capital Accounts
3. Old Partner’s Capital Accounts
4. None of these
At the time of admission of a new partner, Undistributed Profits appearing in the Balance Sheet of the old firm is transferred to the Capital Account of:
1.Old partners is old profit-sharing ratio
2.Old partners in new profit-sharing ratio
3. All the partners in the new profit-sharing ratio
4. None of these
Capital employed in a business is ₹ 1,50,000. Profits are ₹ 50,000 and the normal rate of profit is 20%. The amount of goodwill as per capitalisation method will be:
1.₹ 2,00,000
2.₹ 1,50,000
3. ₹ 3,00,000
4. ₹ 1,00,000
Change in profit-sharing ratio of existing partners results in:
1.Revaluation of Firm
2. Reconstitutions of Firm
3. Dissolution of Firm
4.None of these
Change in the partnership agreement results in:
1. Reconstitution of Firm
2.Dissolution of Firm
3.Amalgamation of Firm
4. None of these
Change in the partnership agreement:
1.Changes the relationship among the partners
2. Results in end of partnership business
3. Dissolves the partnership firm
4.None of these
Excess of credit side over the debit side in Revalution Account is:
1. Profit
2.Loss
3.Receipt
4.Expense
Following are the factors affecting goodwill except:
1.Nature of business
2. Efficiency of Management
3. Technical Knowledge
4.Location of the Customers
Formula of Sacrificing ratio is:
1.New Ratio – Old Ratio
2. Old Ratio – New Ratio
3.Gain Ratio – Sacrificing Ratio
4. New Ratio – Sacrificing Ratio .
Gaining Ratio:
1.New Ratio – Old Ratio
2.Old Ratio – Sacrificing Ratio
3. New Ratio – Sacrificing Ratio
4.Old Ratio – New Ratio
General Reserval at the time of admission of a new partner is transferred to :
1. Revaluation Account
2.Old Partner’s Capital Account
3.Profit and Loss Adjustment Account
4. Realisation Account
Generally the interest on capital is considered as :
1. An appropriation of profit
2. An Asset
3.An Expense
4.None of these
Goodwill is a…………….asset
1.Useless
2. Tangible
3. Worthless
4.Valuable
Goodwill is:
1. Tangible Asset
2. Intangible Asset
3.Current Asset
4. None of these
If the incoming partner brings the amount of goodwill in cash and also a balance exists in Goodwill A/c, then the Goodwill A/c is written off among the old partners:
1.In new profit-sharing ratio
2.In old profit-sharing ratio
3.In sacrificing ratio
4. In gaining ratio
Increase In the value of assets on reconstitution of the partnership firm results into :
1.Gain to the existing partners
2. Loss to the existing partners
3.Neither gain nor loss to the existing partners
4. None of these
Increase in the value of assets on reconstitution of the partnership firm results into:
1. Gain to the existing partners
2. Loss to the existing partners
3.Neither a gain nor a loss to the existing partners
4.None of these
On reconstitution of a partnership firm, recording of an unrecorded liability wil result in:
1. Gain to the existing partners
2. Loss to the existing partners
3. Neither gain nor loss to the existing partners
4.None of these
On the admission of a new partner, increase in the value of assets is debited to which account ?
1. Revaluation Account
2. Assets Account
3. Old Partners’ Capital Accounts
4. None of these
On the admission of a new partner, the decrease in the value of assets is debited to:
1.Revaluation Account
2.Assets Account
3. Old Partners’ Capital Accounts
4.None of these
Profits of the last three years were ₹ 6,000, ₹ 13,000 and ₹ 8,000 respectively. Goodwill at two years purchase of the average net profit will be :
1.₹ 81,000
2. ₹ 27,0000
3. ₹ 9,000
4. ₹ 18,000
Recording of an unrecorded asset on the reconstltutlam of a partnership firm will be:
1. A gain to the existing partners
2. A loss to the existing partners
3.Neither a gain nor a loss to the existing partners
4.None of these
Revaluation Account or Profit & Loss Adjustment Account is a:
1. Personal Account
2.Real Account
3.Nominal Account
4. None of these
Sacrificing Ratio:
1. New Ratio – Old Ratio
2. Old Ratio – New Ratio
3. Gaining Ratio – Old Ratio
4.Old Ratio – Gaining Ratio
Share of goodwill brought in cash by the new partner is called:
1.Assets
2. Profit
3.Premium
4. None of these
The accumulated profits and reserves are transferred to:
1.Realisation A/c
2. Partner’s Capital A/cs
3. Bank A/c
4.Savings A/c
The balance of Revaluation Account is transferred to old Partner’s Capital Accounts in their:
1. Old Profit-sharing Ratio
2.New Profit-sharing Ratio
3.Equal Ratio
4. None of these
The balance of Revaluation Account or Profit & Loss Adjustment Account is transferred to Old Partners’ Capital Accounts in their :
1. Old profit-sharing ratio
2. New profit-sharing ratio
3.Equal ratio
4.Capital ratio
The excess of average profits over the normal profits are called :
1.Super Profits
2.Fixed Profits
3.Abnormal Profits
4. Normal Profits
The monetary value of reputation of the business is called:
1. Goodwill
2. Super Profit
3.Surplus
4. Abnormal Profit
The opening balance of Partner’s Capital Account is credited with:
1. Interest on Capital
2. Interest on Drawings
3. Drawings
4. Share in loss
The profit of the last three years are ₹ 42,000, ₹ 39,000 and ₹ 45,000. Value of goodwill at two years purchases of the average profits will be :
1. ₹ 42,000
2. ₹ 84,000
3.₹ 1,26,000
4. ₹ 36,000
Under average profit basis goodwill is calculated by :
1.No. of years’ purchased x Average profit
2.No. of years’ purchased x Super profit
3.Super Profit -r Expected Rate of Return
4.None of these
Under super profit basis goodwill is calculated by :
1. No. of years’ purchased x Average Profit
2.No. of years’ purchased x Super profit
3. Super profit -r Expected rate of return
4.None of these
Weighted average method of calculating goodwill is used when:
1.Profits are equal
2.Profit has increasing trend
3. Profit has decreasing trend
4. Either (b) or (c)
What do you mean by Super Profit ?
1.Total Profit/No. of Years
2. Average Profit – Normal Profit
3.Weighted Profit/No. of Years’ Purchase
4.None of these
When the new partner pays for goodwill in cash, the amount should be debited in the firm’s book to:
1.Goodwill Account
2.Cash Account
3. Capital Account of new partner
4. None of these
Which of the following is not a method of valuation of Goodwill:
1.Revaluation Method
2. Average Profit Method
3. Super Profit Method
4.Capitalisation Method
X and Y share profit and loss in 3:2. From 1st January, 2017 they agreed to share profit equally. Their sacrifice or gain will be :
1.Sacrifice by X: 1/10
2. Sacrifices by Y : 1/10
3.Both (a) and (b)
4. Non of these
X and Y share profits in the ratio 2 :3. In future they have decided to share profits in equal ratio. Which partner will sacrifice in which ratio ?
1. X sacrifice 1/10
2. Y sacrifice 1/5
3.Y sacrifice 1/10
4.None of these
X and Y share profits in the ratio of 3 : 2 Z was admitted as a partner who gets 1/5 share. Z acquires 3/20 from X and 1/20 from Y. The new profit sharing ratio will be :
1.9 : 7 : 4
2.8 : 8 : 4
3. 6 : 10 : 4
4. 10 : 6 :4
Z is admitted in a firm for a 1/4 share in the profit for which he brings 7 30,000 for goodwill. It will be taken away by the old partners X and Y in :
1.Old profit-sharing ratio
2. New profit-sharing ratio
3.Sacrificing ratio
4. Capital ratio
Z is admitted in a firm for al/4 share in the profit for which he brings 7 30,000 for goodwill. It will be taken away by the old partners X and Y in :
1.Old profit-sharing ratio
2.New profit-sharing ratio
3. Sacrificing ratio
4. Capital ratio