Chapter 2: Reconstitution of a Partnership Firm Admission of a Partner — Online MCQ Test
ACCOUNTANCY · CLASS 12 SECOND PUC · Karnataka State Board
Practice Chapter 2: Reconstitution of a Partnership Firm Admission of a Partner with a free chapter-wise online MCQ test.
This chapter covers: Admission of Partner Reconstitution New Profit Sharing Ratio Sacrificing Ratio Goodwill AS 26 Revaluation Account Assets Liabilities Accumulated Profits Reserves Capital Adjustment.
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Chapter 2: Reconstitution of a Partnership Firm Admission of a Partner — Important Questions & Answers
Admission of a partner leads to which of the following?
- A. Reconstitution of partnership firm
- B. Dissolution of partnership firm only
- C. Compulsory liquidation of business
- D. Conversion of firm into a company
Answer: A. Reconstitution of partnership firm
Admission of a partner changes the existing agreement among partners, so it is treated as reconstitution of the partnership firm.
Admission of a partner changes the existing agreement among partners, so it is treated as reconstitution of the partnership firm.
The ratio in which old partners agree to share future profits with the incoming partner is called the ________.
- A. Old profit sharing ratio
- B. New profit sharing ratio
- C. Sacrificing ratio
- D. Gaining ratio
Answer: B. New profit sharing ratio
After admission, all partners including the new partner share profits in the new profit sharing ratio.
After admission, all partners including the new partner share profits in the new profit sharing ratio.
A and B share profits in the ratio 3:2. C is admitted for 1/5 share, which he acquires from A and B in their old ratio. What is the new profit sharing ratio?
- A. 12:8:5
- B. 3:2:1
- C. 9:6:5
- D. 8:12:5
Answer: A. 12:8:5
C gets 1/5, so remaining 4/5 is shared by A and B in 3:2. A = 3/5 × 4/5 = 12/25, B = 2/5 × 4/5 = 8/25, C = 5/25.
C gets 1/5, so remaining 4/5 is shared by A and B in 3:2. A = 3/5 × 4/5 = 12/25, B = 2/5 × 4/5 = 8/25, C = 5/25.
A and B share profits in the ratio 4:3. C is admitted for 1/7 share. C gets 1/14 from A and 1/14 from B. What is the new profit sharing ratio?
- A. 7:5:2
- B. 8:6:1
- C. 1:1:1
- D. 4:3:1
Answer: A. 7:5:2
A's new share = 4/7 - 1/14 = 7/14; B's new share = 3/7 - 1/14 = 5/14; C's share = 2/14. Ratio is 7:5:2.
A's new share = 4/7 - 1/14 = 7/14; B's new share = 3/7 - 1/14 = 5/14; C's share = 2/14. Ratio is 7:5:2.
A and B share profits in the ratio 4:1. They admit C for 1/5 share. The new ratio is 3:1:1. Which partner sacrifices more and by how much?
- A. A sacrifices more by 1/5
- B. B sacrifices more by 1/10
- C. A sacrifices more by 1/10
- D. Both sacrifice equally
Answer: A. A sacrifices more by 1/5
A's sacrifice = 4/5 - 3/5 = 1/5. B's sacrifice = 1/5 - 1/5 = 0. Hence A sacrifices more by 1/5.
A's sacrifice = 4/5 - 3/5 = 1/5. B's sacrifice = 1/5 - 1/5 = 0. Hence A sacrifices more by 1/5.