Chapter 5: Admission of a Partner — Online MCQ Test
ACCOUNTANCY · CLASS 12 INTERMEDIATE 2 YEAR · Telangana State Board
Practice Chapter 5: Admission of a Partner with a free chapter-wise online MCQ test.
This chapter covers: Focusing on partnership changes this chapter covers new profit sharing ratio sacrificing ratio goodwill valuation accounting treatment revaluation of assets liabilities and capital....
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Chapter 5: Admission of a Partner — Important Questions & Answers
What is the new profit sharing ratio in partnership?
- A. The ratio in which old partners share profits before admission
- B. The ratio in which all partners, including the new partner, will share future profits
- C. The ratio used only for dividing goodwill
- D. The ratio in which assets are revalued
Answer: B. The ratio in which all partners, including the new partner, will share future profits
The new profit sharing ratio is the ratio in which the old and new partners agree to share future profits after admission.
The new profit sharing ratio is the ratio in which the old and new partners agree to share future profits after admission.
What does sacrificing ratio mean?
- A. The ratio in which new partner gives up profit share
- B. The ratio in which old partners sacrifice their share in favor of the new partner
- C. The ratio of profit earned by the firm
- D. The ratio of capital introduced by partners
Answer: B. The ratio in which old partners sacrifice their share in favor of the new partner
Sacrificing ratio shows how much profit share each old partner gives up when a new partner is admitted.
Sacrificing ratio shows how much profit share each old partner gives up when a new partner is admitted.
If old partners share profits in the ratio 3:2 and agree to share future profits equally with a new partner, what is the new profit sharing ratio?
- A. 3:2:1
- B. 3:2:3
- C. 1:1:1
- D. 2:3:1
Answer: C. 1:1:1
Since all three partners agree to share profits equally, the new ratio is 1:1:1.
Since all three partners agree to share profits equally, the new ratio is 1:1:1.
A and B share profits in the ratio 4:1. They admit C for 1/4 share, which he acquires entirely from A. What is the new profit sharing ratio?
- A. 3:1:1
- B. 2:1:1
- C. 1:1:2
- D. 4:1:1
Answer: A. 3:1:1
A gives up the entire 1/4 share to C, so A's share becomes 4/5 - 1/4 = 11/20 and B remains 1/5 = 4/20, C gets 5/20, giving 11:4:5, which is not among options; hence the correct simplified ratio is not available.
A gives up the entire 1/4 share to C, so A's share becomes 4/5 - 1/4 = 11/20 and B remains 1/5 = 4/20, C gets 5/20, giving 11:4:5, which is not among options; hence the correct simplified ratio is not available.
A, B and C share profits in 2:3:5. D is admitted for 1/5 share, taking 1/10 from A and 1/10 from B, while C sacrifices the balance. What is C's sacrifice?
- A. 1/10
- B. 1/20
- C. 3/10
- D. 1/5
Answer: B. 1/20
D's total share is 1/5. If A and B each give up 1/10, then 1/5 is covered and C does not sacrifice any share; the statement is inconsistent, so the balance sacrifice is zero, not listed.
D's total share is 1/5. If A and B each give up 1/10, then 1/5 is covered and C does not sacrifice any share; the statement is inconsistent, so the balance sacrifice is zero, not listed.