Chapter Exam

Chapter 3: Reconstitution of a Partnership Firm Retirement Death of a Partner — Online MCQ Test

Q: Retirement of a partner results in which of the following?

Answer: A. Reconstitution of the partnership firm — Retirement changes the existing agreement among partners, so it is treated as reconstitution of the partnership firm.

Q: The gaining ratio is calculated as:

Answer: B. New share - Old share — Gaining ratio shows the increase in share of continuing partners after retirement or death of a partner.

Q: At the time of retirement, the retiring partner’s share of goodwill is compensated by:

Answer: B. Gaining partners — The continuing partners who gain the retiring partner’s share compensate the retiring partner in the gaining ratio.

Q: If the amount due to a retiring partner is not paid immediately, it is transferred to:

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.

Q: 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?

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.

Q: 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?

Answer: B. ₹18,000 — C’s share is 2/10 of ₹90,000 = ₹18,000.

Q: 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?

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.

Q: 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?

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.

Q: 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?

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.

Q: 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?

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.

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 for Karnataka State Board CLASS 12 SECOND PUC ACCOUNTANCY. 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.

Questions

20m

Time Limit

Attempts Left

10 random questions from this chapter (mixed difficulty)
Questions you've seen before won't repeat until the pool resets
You have 20 minutes — exam auto-submits when time is up
Maximum 3 attempts per chapter
Results and explanations shown immediately after submission

New here? Register free — includes 3 free chapter exams.

Chapter 3: Reconstitution of a Partnership Firm Retirement Death of a Partner — Important Questions & Answers (FAQ)

Frequently asked questions from Karnataka State Board CLASS 12 SECOND PUC ACCOUNTANCY — Chapter 3: Reconstitution of a Partnership Firm Retirement Death of a Partner, with answers and explanations. These are sample questions; the exam has its own separate question set.

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.

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.

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.

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.

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, 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.

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.

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.

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.

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.

← Previous Chapter

Chapter 2: Reconstitution of a Partnership Firm Admission of a Partner

Next Chapter →

Chapter 4: Dissolution of Partnership Firm