MCQ Chapter 4 Reconstitution of a Partnership Firm – Retirement/Death of a Partner Class 12 Accountancy

MCQ Questions Class 12

Please refer to Retirement/Death of a Partner MCQ Questions Class 12 Accountancy below. These MCQ questions for Class 12 Accountancy with answers have been designed as per the latest NCERT, CBSE books and syllabus issued for the current academic year. These objective questions for Retirement/Death of a Partner will help you to prepare for the exams and get more marks.

Retirement/Death of a Partner MCQ Questions Class 12 Accountancy

Please see solved MCQ Questions for Retirement/Death of a Partner in Class 12 Accountancy. All questions and answers have been prepared by expert faculty of standard 12 based on latest examination guidelines.

MCQ Questions Class 12 Accountancy Retirement/Death of a Partner

Question. Gaining ratio is calculated at the time of
(a) Admission of a partner
(b) Retirement of a Partner
(c) Dissolution of a partnership firm
(d) Both (a) and (c)

Answer

B

Question. If Goodwill is appearing in the balance sheet , it will be Credited to
(a) Gaining partner
(b) Retiring partners
(c) All partners
(d) Remaining Partners

Answer

C

Question. Gain of Revaluation at the time of retirement is transferred to:
(a) All Partners
(b) Outgoing partner
(c) Remaining Partner
(d) Retiring Partner

Answer

A

Question. Gaining ratio is calculated by
(a) Old ratio – new share
(b) Old share + acquired share
(c) New share – old share
(d) New share + old share

Answer

C

Question. A, B, C are partners sharing profit and losses in the ratio of 4:3:1: B retires and gives his share of profit to A Rs. 3,600 and C Rs. 4,500. What is the Gaining sharing ratio of A and C?
(a) 4:5
(b) 2:1
(c) 68:48
(d) 4: 1 

Answer

A

Question. In which ratio Retiring partner is compensated by the continuing partner for his share of goodwill,in which ratio?
(a) Gaining ratio
(b) Sacrificing ratio
(c) Old ratio
(d) New ratio 

Answer

A

Question. Revaluation account is prepared at the time of :
(a) Admission of partner
(b) Retirement of a partner
(c) Death of a partner
(d) Reconstitution of the firm 

Answer

D

Question. If three partners A, B, C are sharing profit as 5:3:2,then on the death of a partner A, how much B and C will pay to A executor on account of goodwill. Goodwill is to be calculated on the basic of 2 years purchase of last 3 years average profit, profits for the last 3 years are Rs. 3,28,000 Rs. 3,46,000 and Rs. 4,00,000.
(a) Rs. 3,16,000 and Rs. 1,42,000
(b) Rs. 2,44,000 and Rs. 2,16,000
(c) Rs. 4,29,600 and Rs. 2,86,400
(d) Rs. 2,16,000and Rs. 1,44,000

Answer

C

Question. If the retiring partner is not paid full amount due to him immediately on retirement, his balance is transferred to his: 
(a) Loan A/c
(b) Capital A/c
(c) Bank A/c
(d) Suspense A/c

Answer

A

Question. A, B, C were partners sharing Profit and Losses in the ratio of 3.2.1 Books are closed on 31stMarch every year. C dies on 30th, Nov 2018. Under the partnership deed, the executors of deceased partner are entitled to his share of profit up to the date of death, Profit as on ended 31st Mar 2018 was Rs. 2,40,000 C’s share of profit will be
(a) 26667
(b) 40000
(c) 30000
(d) 53333

Answer

A

Question. Amount due to outgoing partner is shown on the balance sheet as his
(a) Liability
(b) Asset
(c) Capital
(d) Loan 

Answer

D

Question. A, B and C are partners in a firm sharing profit and losses in 3:4:2 B retire from the firm. The profit on revaluation on that date was Rs. 72,000, New ratio between A and C is 5:3 Profit on revaluation will be distributed as:
(a) A Rs. 32,000 B Rs. 24,000 C Rs. 16,000
(b) ARs. 24,000 B Rs. 32,000 C Rs. 16,000
(c) A Rs. 45,000 C Rs. 27,000
(d) ARs. 47,250 C Rs. 24,750

Answer

B

Question. P, Q and R sharing profit and losses in the ratio of 8:5:3. Q retire from the firm takes 3/16 from P and R takes 5/16 from P. New profit sharing ratio between Q and R will be
(a) 1:1
(b) 10:6
(c) 9:7
(d) 5:3 

Answer

A

Question. In the event of death of a partner of employees provided fund appears in the balance will be shown in
(a) Capital A/c (Cr.)
(b) Account (Dr.)
(c) Liability side [Balance Sheet]
(d) Asset side[Balance Sheet]

Answer

C

Question.Revaluation account is prepare to calculate gain or loss at the time of
(a) Admission of partner
(b) Retirement of a partner
(c) Death of a partner
(d) All of a above  

Answer

D

Question. Share of goodwill of the retiring partner is debited to remaining partners in their
(a) Old ratio
(b) New ratio
(c) Gaining ratio
(d) Sacrificing ratio

Answer

C

Question. An account prepared to ascertain the gain or loss at the time of death of a partner is called
(a) A realisation Account
(b) Executors Account
(c) Revaluation Account
(d) Decreased Partner

Answer

C

Question. A, B and C are partner with Profit and Losses in the ratio of 4:3:2. B retires if A and C share profit of b in 5:3 then find the new profit sharing ratio
(a) 47:25
(b) 17:11
(c) 31:11
(d) 14:21

Answer

A

Question. Outgoing partner give his share of profit remaining partners. In what ratio do the remaining partners contribute to such compentation amount?
(a) Gaining ratio
(b) Capital ratio
(c) Sacrificing ratio
(d) Old profit sharing ratio

Answer

A

Question.24 A ,B & C are partners sharing profits in ratio 3:2:1.C retired from the firm . The total capital of new firm is fixed at Rs 60,000 . What will be the new capital of A and B :
(a) Rs 30,000 and Rs 30,000
(b) Rs 24,000 and Rs 36,000
(c) Rs 36,000 and Rs 24,000
(d) Rs 40,000 and Rs 20,000

Answer

C

Question. Claim of the retiring partner is payable in the following form
(a) Fully in cash
(b) Fully transferred to loan A/c to be paid later with some interest on it
(c) Party in cash and party as loan repayable later with agreed interest
(d) Any of the above method 

Answer

Question.25 A ,B and C are partners sharing profits in the ratio 2:2:1. B retires from the firm .The capital account of A,B and C are Rs 60,000 Rs70,000 and Rs 50,000 respectively after adjustment of goodwill , reserved and revaluation . B was to paid in cash brought in by A and C in such a way that there capital are in proportion of new ratio . How much amount A and C must bring to pay B :
(a)A Rs 50,000 by A & Rs 20,000 by
(b)B B Rs 60,000 by A & Rs 10,000 by B
(c)C Rs35,000 by A and Rs 35,000 by B
(d)D Rs 40,000 by A and Rs 30,000 by B

Answer

B

Question. A, B and C sharing profit in ratio 3:2:1 C retires from the firm. Goodwill is to be valued at Rs. 60,000 find the amount payable to retiring on account of goodwill
(a) Rs. 30,000
(b) Rs. 20,000
(c) Rs. 10,000
(d) Rs. 60,000.

Answer

B

Question. At the time death of a partner general reserve appearing in the balance sheet should be credited to:
(a) All partners including deceased partner in their old profit sharing ratio
(b) Remaining partners in the new profit sharing ratio
(c) Neither the decreased nor the remaining partners
(d) Remaining partner in gaining ratio 

Answer

A

Question. Retiring or outgoing partner
(a) Is liable for firm liabilities
(b) Not liable for any liabilities of the firm
(c) Is liable for obligation incurred before his retirement
(d) Is liable for obligation incurred before and after his retirement

Answer

C

Question.P, Q and R are partners sharing profits in the ratio of 8:5:3. P retires. Q takes 3/16th share from P and R takes 5/16th share from P. What will be the new profit sharing ratio?
(a) 1:1
(b) 10:6
(c) 9:7
(d) 5:3

Answer

A

Question. X, Y and Z are partners sharing profits and losses in the ratio of 4:3:2. Y retires and surrenders 1/9th of his share in favour of X and the remaining in favour of Z. The new profit sharing ratio will be:
(a) 1:8
(b) 13:14
(c) 8:1
(d) 14:13

Answer

B

Question. At the time of retirement of a partner, share of retiring partner’s goodwill will be credited to —————- Capital Account(s).
(a) Remaining Partner(s)
(b) Retiring Partner’s
(c) Both Sacrificing and Gaining Partner(s)
(d) Gaining Partner(s)

Answer

B

Question. On retirement of a partner, debtors of Rs. 34,000 were shown in the Balance sheet. Out of this Rs. 4,000 became bad. One debtor became insolvent. 70% were recovered from him out of Rs. 10,000. Full amount is expected from the balance debtors. On account of this item loss in revaluation account will be:
(a) Rs. 10,200
(b) Rs. 3,000
(c) Rs. 7,000
(d) Rs. 4,000

Answer

C

Question.As per Section 37 of the Indian Partnership Act, 1932, interest @ ———– is payable to the retiring partner if full or part of his dues remain unpaid.
(a) 9% p.m.
(b) 12% p.m.
(c) 6% p.m.
(d) None of the above

Answer

D

Question.A, B and C were partners. Their partnership deed provided that they were to share profits as; A 26 per cent; B 34 per cent; C 40 per cent ; and that if a partner retires, his capital should remain in the business for a stated period at a fixed rate of interest, but that the retiring partner’s share should be credited with an amount for Goodwill, based upon one and a half year’s average profits, for the five years prior to his death, but be subject to deduction of 5 per cent from the book debts. C retired, and the profits of the firm for five years were agreed at Rs. 20,000; Rs. 30,000; Rs. 15,000 (loss); Rs. 5,000 (loss); and Rs. 45,000 respectively. Book Debts stood at Rs. 90,000.The share of Goodwill to be credited to C’s Account will be:
(a) Rs. 2,700
(b) Rs. 6,300
(c) Rs. 7,200
(d) Rs. 3,600

Answer

C

Question. If goodwill is already appearing in the books of accounts at the time of retirement, then it should be written off in ————-.
(a) New Ratio
(b) Gaining Ratio
(c) Sacrificing Ratio
(d) Old Ratio

Answer

D

Question. If at the time of retirement, there is some unrecorded asset, it will be ————- to ————- Account.
(a) Debited, Revaluation
(b) Credited, Revaluation
(c) Debited, Goodwill
(d) Credited, Partners’ Capital

Answer

B

Question. When the balance sheet is prepared after retirement (subsequent to preparation of Revaluation Account), ————- values are shown in it.
(a) Historical
(b) Realisable
(c) Market
(d) Revalued

Answer

D

Question. X,Y and Z were partners in a firm sharing profits in ratio of 3:4:1 X retired and new profit sharing ratio between Y and Z will be 5 :4 .On X’s retirement the goodwill of the firm was valued at ₹̈́ 54,000 .journal entry will be:
(A) Y’s capital Dr. 24,000
Z’s capital Dr. 30,000
X’s capital 54,000
(B) Y’s capital Dr. 15,000
Z’s capital Dr. 12,,000
X’s capital 27000
(C) Y’s capital Dr. 12,000
Z’s capital Dr. 15,000
X’s capital 27,000
(D) X’s capitals a/c Dr. 27,000
To Y’s capitals 12,000
To Z’s capitals 15,000

Answer

C

Question. Anil, Bimal and Chetan are partners sharing their profits and losses in the ratio of 4:3:2. On 1.7.2013, Chetan retired and on that date the capitals of Anil, Bimal and Chetan after all necessary adjustments stood at Rs. 75,000, Rs. 65,000 and Rs. 45,000 respectively. Anil and Bimal continued to carry the business for 6 months without settling Chetan’s account. During the period of six months ending 31st December,2013, a profit of Rs. 50,000 is earned by the firm. Keeping Chetan’s interest in mind, the amount payable to Chetan will be:
(a) Rs. 1,350
(b) Rs. 13,362
(c) Rs. 12,162
(d) Rs. 1,362

Answer

C

Question. As per section ———— of the Indian Partnership Act, a retiring partner becomes entitled to profits after retirement if his dues remain unpaid
(a) Section 73
(b) Section 26
(c) Section 4
(d) Section 37

Answer

D

Question. Retiring partner is compensated for parting with the firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in:
(a) Gaining Ratio
(b) Sacrificing Ratio
(c) Capital Ratio
(d) Profit Sharing Ratio

Answer

A

Question. At the time of retirement, amount remaining in Investment Fluctuation Reserve after meeting the fall in value of Investment is:
(a) Credited in Sacrificing Ratio
(b) Credited in New Profit Sharing Ratio
(c) Credited in Old Profit Sharing Ratio
(d) Credited in Gaining Ratio

Answer

C

Question. P, Q and R were partners in a firm in the ratio of 5:4:3. They admit S for 1/7 share. It is agreed that Q would retain his original share. ———– will be the sacrificing ratio between P and R.
(a) 5:4
(b) 1:1
(c) 5:3
(d) 4:3

Answer

C

Question. In Death of a partner the share of profit of deceased partner is calculated either on time basis or on turnover basic.

Answer

True

Question. Goodwill is recorded in the books only when it is purchased.

Answer

True

Question. Profit sharing ratio of remaining partner is decided according to mutual agreement among the remaining partners.

Answer

Question. Goodwill may be written off in all the partners are in old profit sharing ratio.

Answer

True

Question. The amount paid to the retiring partners is excess of his capital after adjusting accumulated profits/losses revaluation profits/losses, share of goodwill etc is taken as his share of hidden goodwill of the firm.

Answer

True

Question. The death of a partner, deceased partner share in the goodwill is divides equally among continuing partners.

Answer

False

Question. The gaining partners should compensate the sacrificing partners to the extent of their gain for the respective share of goodwill.

Answer

True

Question. Death of a partner is like a compulsory retirement.

Answer

True

Question. Goodwill will be debited with the agrees value less already shown in the Balance sheet.

Answer

False

Question. Retiring partners’ share of goodwill is debited to his his/her capital account at the time of retirement.

Answer

False

Question. The executer is entitles to all the right of a __________.

Answer

Deceased Partner

Question. Goodwill will be debited with the agreed value_________ goodwill already shown in the book.

Answer

Less

Question. Market value of the business – net worth of the business = ________.

Answer

Goodwill

Question. Interest on drawings due from deceased partner till the date of the death is _______ to his capital account.

Answer

Debit

Question. Share of goodwill of the decease partner is ________ to his capital account.

Answer

Credited

Question. The executor of the deceased partner is entitled to all the right of __________.

Answer

Deceased Partner

Question. Share of goodwill of the deceased partner is _______ to his capital account.

Answer

Credited

Question. In case of death of a partner the profit may be estimated on the basis of ______ and_______.

Answer

Time, Sales

Question. The balance in the capital account of the deceased partner is transferred to his ______ account.

Answer

Executor’s

Question. The balance in the capital account of the deceased partner is transferred to his _________ account.

Answer

Executor

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