Chapter 3: Reconstitution of a Partnership Firm Retirement Death of a Partner — Online MCQ Test
ACCOUNTANCY · CLASS 12 SECOND PUC · Karnataka State Board
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This chapter covers: Retirement of Partner Death of Partner Gaining Ratio Capital Adjustment Partner Settlement Retiring Partner Loan Executor Account Goodwill Revaluation Accumulated Profits Capital A....
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Chapter 3: Reconstitution of a Partnership Firm Retirement Death of a Partner — Important Questions & Answers
Retirement of a partner results in which of the following?
- A. Reconstitution of the partnership firm
- B. Compulsory dissolution of the firm
- C. Formation of a company
- D. Cancellation of all assets
Answer: A. Reconstitution of the partnership firm
Retirement changes the existing agreement among partners, so it is treated as reconstitution of the partnership firm.
Retirement changes the existing agreement among partners, so it is treated as reconstitution of the partnership firm.
The gaining ratio is calculated as:
- A. Old share - New share
- B. New share - Old share
- C. Old share + New share
- D. New share × Old share
Answer: B. New share - Old share
Gaining ratio shows the increase in share of continuing partners after retirement or death of a partner.
Gaining ratio shows the increase in share of continuing partners after retirement or death of a partner.
A, B and C share profits in the ratio 3:2:1. C retires and A and B decide to share future profits in the ratio 3:2. What is the gaining ratio of A and B?
- A. 1:1
- B. 3:2
- C. 2:3
- D. 1:2
Answer: B. 3:2
A’s gain = 3/5 - 3/6 = 1/10 and B’s gain = 2/5 - 2/6 = 1/15. Therefore, gaining ratio = 1/10:1/15 = 3:2.
A’s gain = 3/5 - 3/6 = 1/10 and B’s gain = 2/5 - 2/6 = 1/15. Therefore, gaining ratio = 1/10:1/15 = 3:2.
A, B and C share profits in the ratio 3:2:1. C retires. C’s capital before adjustments is ₹70,000. General Reserve is ₹36,000, revaluation loss is ₹18,000, goodwill of the firm is ₹60,000, and C’s drawings are ₹5,000. What is the amount due to C?
- A. ₹68,000
- B. ₹78,000
- C. ₹88,000
- D. ₹98,000
Answer: B. ₹78,000
C’s share of reserve = ₹6,000, revaluation loss = ₹3,000, goodwill = ₹10,000. Amount due = ₹70,000 + ₹6,000 - ₹3,000 + ₹10,000 - ₹5,000 = ₹78,000.
C’s share of reserve = ₹6,000, revaluation loss = ₹3,000, goodwill = ₹10,000. Amount due = ₹70,000 + ₹6,000 - ₹3,000 + ₹10,000 - ₹5,000 = ₹78,000.
A, B and C share profits in the ratio 3:2:1. C retires and is paid ₹1,50,000. After all adjustments except goodwill, C’s capital balance is ₹1,20,000. What is the total value of the firm’s hidden goodwill?
- A. ₹30,000
- B. ₹90,000
- C. ₹1,50,000
- D. ₹1,80,000
Answer: D. ₹1,80,000
Excess payment to C = ₹30,000, which represents C’s 1/6 share of goodwill. Total goodwill = ₹30,000 × 6 = ₹1,80,000.
Excess payment to C = ₹30,000, which represents C’s 1/6 share of goodwill. Total goodwill = ₹30,000 × 6 = ₹1,80,000.