Chapter 3: Reconstitution of a Partnership Firm Retirement Death of a Partner — Online MCQ Test
ACCOUNTANCY · CLASS 12 SECOND PUC · Karnataka State Board
Practice Chapter 3: Reconstitution of a Partnership Firm Retirement Death of a Partner with a free chapter-wise online MCQ test.
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....
AI-generated questions from basic to board-exam level, with instant results and explanations.
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.
At the time of retirement, the retiring partner’s share of goodwill is compensated by:
- A. Sacrificing partners
- B. Gaining partners
- C. Only the senior partner
- D. All creditors
Answer: B. Gaining partners
The continuing partners who gain the retiring partner’s share compensate the retiring partner in the gaining ratio.
The continuing partners who gain the retiring partner’s share compensate the retiring partner in the gaining ratio.
If the amount due to a retiring partner is not paid immediately, it is transferred to:
- A. Retiring Partner’s Loan Account
- B. Revaluation Account
- C. Goodwill Account
- D. Cash Account
Answer: A. Retiring Partner’s Loan Account
The unpaid amount due to the retiring partner is treated as a liability of the firm and transferred to the retiring partner’s loan account.
The unpaid amount due to the retiring partner is treated as a liability of the firm and transferred to the retiring partner’s loan account.
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 5:3:2. C retires. Goodwill of the firm is valued at ₹90,000. What is C’s share of goodwill?
- A. ₹9,000
- B. ₹18,000
- C. ₹27,000
- D. ₹45,000
Answer: B. ₹18,000
C’s share is 2/10 of ₹90,000 = ₹18,000.
C’s share is 2/10 of ₹90,000 = ₹18,000.
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 5:3:2. C retires and A and B gain in the ratio 2:3. What is the new profit-sharing ratio of A and B?
- A. 5:3
- B. 29:21
- C. 21:29
- D. 2:3
Answer: B. 29:21
C’s share 2/10 is gained by A and B in 2:3, so A gains 4/50 and B gains 6/50. New shares are 29/50 and 21/50, so the new ratio is 29:21.
C’s share 2/10 is gained by A and B in 2:3, so A gains 4/50 and B gains 6/50. New shares are 29/50 and 21/50, so the new ratio is 29:21.
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.
A, B and C share profits in the ratio 7:5:4. C retires. A acquires 1/4 of C’s share and B acquires the remaining share of C. What are the gaining ratio and new ratio respectively?
- A. Gaining ratio 1:3; New ratio 1:1
- B. Gaining ratio 3:1; New ratio 1:1
- C. Gaining ratio 1:1; New ratio 7:5
- D. Gaining ratio 7:5; New ratio 1:3
Answer: A. Gaining ratio 1:3; New ratio 1:1
C’s share is 4/16. A gains 1/4 of 4/16 = 1/16 and B gains 3/16, so gaining ratio is 1:3. New shares become A 8/16 and B 8/16, i.e. 1:1.
C’s share is 4/16. A gains 1/4 of 4/16 = 1/16 and B gains 3/16, so gaining ratio is 1:3. New shares become A 8/16 and B 8/16, i.e. 1:1.