Bihar Board 12th Accountancy Objective Questions and Answers
Bihar Board 12th Accountancy Objective Answers Chapter 3 Reconstitution of Partnership Firm: Admission of a Partner
Question 1.
Change in profit-sharing ratio of existing partners results in:
(A) Revaluation of Firm
(B) Reconstitutions of Firm
(C) Dissolution of Firm
(D) None of these
Answer:
(B) Reconstitutions of Firm
Question 2.
X, Y and Z are partners in a firm, they divided profit and loss in the ratio of 4:3:1. They decided to share profit In the ratio 5:4:3. X’s and Y’s sacrifices are :
(A) \(\frac{2}{24}: \frac{1}{24}\)
(B) \(\frac{1}{24}: \frac{3}{24}\)
(C) \(\frac{2}{24}: \frac{3}{24}\)
(D) None of these
Answer:
(A) \(\frac{2}{24}: \frac{1}{24}\)
Question 3.
On reconstitution of a partnership firm, recording of an unrecorded liability wil result in:
(A) Gain to the existing partners
(B) Loss to the existing partners
(C) Neither gain nor loss to the existing partners
(D) None of these
Answer:
(B) Loss to the existing partners
Question 4.
Increase In the value of assets on reconstitution of the partnership firm results into :
(A) Gain to the existing partners
(B) Lossa to the existing partners
(C) Neither gain nor loss to the existing partners
(D) None of these
Answer:
(A) Gain to the existing partners
Question 5.
The balance of Revaluation Account is transferred to old Partner’s Capital Accounts in their:
(A) Old Profit-sharing Ratio
(B) New Profit-sharing Ratio
(C) Equal Ratio
(D) None of these
Answer:
(A) Old Profit-sharing Ratio
Question 6.
X and Y share profits in the ratio 2 :3. In future they have decided to share profits in equal ratio. Which partner will sacrifice in which ratio ?
(A) X sacrifice 1/10
(B) Y sacrifice 1/5
(C) Y sacrifice 1/10
(D) None of these
Answer:
(C) Y sacrifice 1/10
Question 7.
Change in the partnership agreement results in:
(A) Reconstitution of Firm
(B) Dissolution of Firm
(C) Amalgamation of Firm
(D) None of these
Answer:
(A) Reconstitution of Firm
Question 8.
Change in the partnership agreement:
(A) Changes the relationship among the partners
(B) Results in end of partnership business
(C) Dissolves the partnership firm
(D) None of these
Answer:
(A) Changes the relationship among the partners
Question 9.
Excess of credit side over the debit side in Revalution Account is:
(A) Profit
(B) Loss
(C) Receipt
(D) Expense
Answer:
(A) Profit
Question 10.
A, B and C are partners in a firm, if D is admitted as a new partner:
(A) Old firm is dissolved
(B) Old firm and old partnership are dissolved
(C) Old partnership is reconstituted
(D) None of these
Answer:
(C) Old partnership is reconstituted
Question 11.
Recording of an unrecorded asset on the reconstltutlam of a partnership firm will be:
(A) A gain to the existing partners
(B) A loss to the existing partners
(C) Neither a gain nor a loss to the existing partners
(D) None of these
Answer:
(A) A gain to the existing partners
Question 12.
Revaluation Account or Profit & Loss Adjustment Account is a:
(A) Personal Account
(B) Real Account
(C) Nominal Account
(D) None of these
Answer:
(C) Nominal Account
Question 13.
A, B, C and D are partners sharing their profits and losses equally. They change their profit sharing ratio to 2:2:1:1. How much will C sacrifice ?
(A) 1/6
(B) 1/12
(C) 1/24
(D) None of these
Answer:
(D) None of these
Question 14.
Sacrificing Ratio:
(A) New Ratio – Old Ratio
(B) Old Ratio – New Ratio
(C) Gaining Ratio – Old Ratio
(D) Old Ratio – Gaining Ratio
Answer:
(B) Old Ratio – New Ratio
Question 15.
Gaining Ratio:
(A) New Ratio – Old Ratio
(B) Old Ratio – Sacrificing Ratio
(C) New Ratio – Sacrificing Ratio
(D) Old Ratio – New Ratio
Answer:
(A) New Ratio – Old Ratio
Question 16.
X and Y share profit and loss in 3:2. From 1st January, 2017 they agreed to share profit equally. Their sacrifice or gain will be :
(A) Sacrifice by X: 1/10
(B) Sacrifices by Y : 1/10
(C) Both (A) and (B)
(D) Non of these
Answer:
(C) Both (A) and (B)
Question 17.
At the time of admission of a new partner, General Reserve a appearing in the old Balances Sheet is trasferred to:
(A) All Partner’s Capital Accounts .
(B) New Partners’ Capital Accounts
(C) Old Partner’s Capital Accounts
(D) None of these
Answer:
(C) Old Partner’s Capital Accounts
Question 18.
Change in profit-sharing ratio of existing partners results in:
(A) Revaluation of Firm
(B) Reconstitution of Firm
(C) Dissolution of Firm
(D) None of these
Answer:
(B) Reconstitution of Firm
Question 19.
Generally the interest on capital is considered as :
(A) An appropriation of profit
(B) An Asset
(C) An Expense
(D) None of these
Answer:
(A) An appropriation of profit
Question 20.
Increase in the value of assets on reconstitution of the partnership firm results into:
(A) Gain to the existing partners
(B) Loss to the existing partners
(C) Neither a gain nor a loss to the existing partners
(D) None of these
Answer:
(A) Gain to the existing partners
Question 21.
Following are the factors affecting goodwill except:
(A) Nature of business
(B) Efficiency of Management
(C) Technical Knowledge
(D) Location of the Customers
Answer:
(C) Technical Knowledge
Question 22.
The profit of the last three years are ₹ 42,000, ₹ 39,000 and ₹ 45,000. Value of goodwill at two years purchases of the average profits will be :
(A) ₹ 42,000
(B) ₹ 84,000
(C) ₹ 1,26,000
(D) ₹ 36,000
Answer:
(B) ₹ 84,000
Question 23.
Under average profit basis goodwill is calculated by :
(A) No. of years’ purchased x Average profit
(B) No. of years’ purchased x Super profit
(C) Super Profit -r Expected Rate of Return
(D) None of these
Answer:
(A) No. of years’ purchased x Average profit
Question 24.
Goodwill is:
(A) Tangible Asset
(B) Intangible Asset
(C) Current Asset
(D) None of these
Answer:
(B) Intangible Asset
Question 25.
An asset which is not ficitious but intangible in nature, having realisable value is :
(A) Machinery
(B) Building
(C) Furniture
(D) Goodwill
Answer:
(D) Goodwill
Question 26.
Which of the following is not a method of valuation of Goodwill:
(A) Revaluation Method
(B) Average Profit Method
(C) Super Profit Method
(D) Capitalisation Method
Answer:
(A) Revaluation Method
Question 27.
The excess of average profits over the normal profits are called :
(A) Super Profits
(B) Fixed Profits
(C) Abnormal Profits
(D) Normal Profits
Answer:
(A) Super Profits
Question 28.
Goodwill is a…………….asset
(A)Uselss
(B) Tangible
(C) Worthless
(D) Valuable
Answer:
(C) Worthless
Question 29.
Under super profit basis goodwill is calculated by :
(A) No. of years’ purchased x Average Profit
(B) No. of years’ purchased x Super profit
(C) Superprofit -r Expected rate of return
(D) None of these
Answer:
(B) No. of years’ purchased x Super profit
Question 30.
Profits of the last three years were ₹ 6,000, ₹ 13,000 and ₹ 8,000 respectively. Goodwill at two years purchase of the average net profit will be :
(A) ₹ 81,000
(B) ₹ 27,0000
(C) ₹ 9,000
(D) ₹ 18,000
Answer:
(D) ₹ 18,000
Question 31.
What do you mean by Super Profit ?
(A) Total Profit/No. of Years
(B) Average Profit – Normal Profit
(C) Weighted Profit/No. of Years’ Purchase
(D) None of these
Answer:
(B) Average Profit – Normal Profit
Question 32.
Capital empolyed in a business is ₹ 1,50,000. Profits are ₹ 50,000 and the normal rate of profit is 20%. The amount of goodwill as per capitalisation method will be:
(A) ₹ 2,00,000
(B) ₹ 1,50,000
(C) ₹ 3,00,000
(D) ₹ 1,00,000
Answer:
(D) ₹ 1,00,000
Question 33.
Weighted average method of calculating goodwill is used when:
(A) Profits are equal
(B) Profit has increasing trend
(C) Profit has decreasing trend
(D) Either (B) or (C)
Answer:
(D) Either (B) or (C)
Question 34.
The monetary value of reputation of the business is called:
(A) Goodwill
(B) Super Profit
(C) Surplus
(D) Abnormal Profit
Answer:
(A) Goodwill
Question 35.
A firm has an average profit of ₹ 60,000 Rate of return on capital employed is 12.5% p.a. Total capital employed in the firm was ₹ 4,00,000. Goodwill on the basis of two years purchase of super profit is :
(A) ₹ 20,000
(B) ₹ 15,000
(C) ₹ 10,000
(D) None of these
Answer:
(A) ₹ 20,000
Question 36.
Under capitalisation method, goodwill is calculated by :
(A) Average Profit x No. of Years’ Purchase
(B) Super Profit x No. of Years’ Purchase
(C) Total of the discounted value of expected future benefits
(D) Super Profit -r Expected Rate of Return
Answer:
(D) Super Profit -r Expected Rate of Return
Question 37.
“Goodwill is nothing more than probability that the old customer will resort to the old place.” This definition of goodwill was given by :
(A) Spicer and Pegler
(B) ICAI
(C) Lord Eldon
(D) AICPA
Answer:
(C) Lord Eldon
Question 38.
What will be the value of goodiwll at twice the average of last three years profit if the profits of the last three years were ₹ 4,000, ₹ 5,000 and ₹ 6,000 ?
(A) ₹ 5,000
(B) ₹ 10,000
(C) ₹ 8,000
(D) None of these
Answer:
(B) ₹ 10,000
Question 39.
The Valuation of Goodwill is not necessary in Sole Trading:
(A) On selling the Firm
(B) On making a partner
(C) On estimation of Assets
(D) On Closing the Firm
Answer:
(D) On Closing the Firm
Question 40.
Goodwill is nothing more than probability that the old customer will resort to the old place.” This definition of goodwill was given by :
(A) Spicer and Pegler
(B) ICAI
(C) Lord Elton
(D) AICPA
Answer:
(C) Lord Elton
Question 41.
Goodwill is to be calculated at one and half year’ purchase of average profit of last 5 years. The firm earned profits during 3 years as ₹ 20,000 ₹ 18,000 and ₹ 9,000 and suffered losses of ₹ 2,000 and ₹5,000 in last 2 years. The amount of goodwill will be :
(A) ₹ 12,000
(B) ₹ 10,000
(C) ₹ 15,000
(D) None of these
Answer:
(A) ₹ 12,000
Question 42.
When there is no Goodwill Account in the books and goodwill is raised,…………….account will be debited :
(A) Partner’s Capital
(B) Goodwill
(C) Cash
(D) Reserve
Answer:
(B) Goodwill
Question 43.
The amount of goodwill is paid by new partner :
(A) for the payment of capital
(B) for sharing the profit
(C) for purchase of assets
(D) None of these
Answer:
(B) for sharing the profit
Question 44.
At the time of admission of a new partners general reserve appearning in the old Balance Sheet is transferred to:
(A) All Partner’s Capital Accounts
(B) New Partner’s Capital Account
(C) Old Partners’. Capital Accounts
(D) None of these
Answer:
(C) Old Partners’. Capital Accounts
Question 45.
Profit or Loss on Revaluation is borne by:
(A) Old Partners
(B) New Partners
(C) All Partners
(D) Only Two Partners
Answer:
(A) Old Partners
Question 46.
Share of goodwill brought by new partner in case is shared by old partners in :
(A) Sacrificing Ratio
(B) Old Ratio
(C) New Ratio
(D) Equal Ratio
Answer:
(A) Sacrificing Ratio
Question 47.
A, Band Care three partners sharing profits and losses in the ratio of 4:3:2. D is admitted for 1/10 share, the new ratio will be :
(A) 10 : 7 : 7 :4
(B) 5 : 3 : 2 : 1
(C) 4 : 3 : 2 : 1
(D) None of these
Answer:
(C) 4 : 3 : 2 : 1
Question 48.
A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C as a new partner for 1/3 rd share in the profits of the firm. The new profit sharing ratio of A, B and C would be :
(A) 3 : 2 : 1
(B) 3 : 2 : 2
(C) 3 : 2 : 3
(D) 6 : 4 : 5
Answer:
(D) 6 : 4 : 5
Question 49.
X and Y are partners sharing profits in the ratio of 1:1. They admit Z for 1/5 th share who contributed ₹25,000 for his share of goodwill. The total value of goodwill of the firm will be :
(A) ₹ 2,50,000
(B) ₹ 50,000
(C) ₹ 1,00,000
(D) ₹ 1,25,000
Answer:
(C) ₹ 1,00,000
Question 50.
A, B and C are partners in a firm. If D is admitted as a new partner, then:
(A) Old firm is dissolved
(B) Old firm and old partnership is dissolved
(C) Old Partnership is reconsitituted
(D) None of these
Answer:
(C) Old Partnership is reconsitituted
Question 51.
In which ratio, the cash brought in for goodwill by the new partner is shared by the existing partners :
(A) Profit sharing ratio
(B) Capital ratio
(C) Sacrificing ratio
(D) None of these
Answer:
(C) Sacrificing ratio
Question 52.
Sacrificing ratio is ascertained at the time of:
(A) Death of a partner
(B) Retirement of a partner
(C) Admission of a partner
(D) None of these
Answer:
(C) Admission of a partner
Question 53.
If at the time of admission of new partner, Profit and Loss Account balance appears in the books, it will the transferred to:
(A) Profit & Loss Appropriation A/c
(B) All Partners’ Capital A/cs
(C) Old Partners’ Capital A/cs
(D) Revaluation A/c
Answer:
(C) Old Partners’ Capital A/cs
Question 54.
State the ‘true’ statement:
(A) Profit & Loss Adjustment A/c is prepared for • revaluated of assets and liabilities on the admission
of a partner
(B) The new partner is liable for the past losses of the firm
(C) In case the new partner is unable to bring in cash for goodwill, Goodwill Account may be raised in the firm’s books as per AS-26
(D) When a pamter is admitted, there is dissolution of firm
Answer:
(A) Profit & Loss Adjustment A/c is prepared for • revaluated of assets and liabilities on the admission of a partner
Question 55.
Excess of the credit side over the debit side of Revaluation account is:
(A) Profit
(B) Loss
(C) Gain
(D) Expense
Answer:
(A) Profit
Question 56.
Balance sheet prepared after new partnership agreement, assets and liabilities are recorded at:
(A) Original Value
(B) Revalued Figure
(C) At Realisable Value
(D) Either of (A) or (B)
Answer:
(B) Revalued Figure
Question 57.
Assets and Liabilities are shown at their revalued values in :
(A) New Balance Sheet
(B) Revaluation A/c
(C) All Partner’s Capital A/c’s
(D) Realisation A/c
Answer:
(A) New Balance Sheet
Question 58.
Which of the following assets is compulsorily revalued at the time of admission of a new partner :
(A) stock
(B) Fixed Assets
(C) Investment
(D) Goodwill
Answer:
(D) Goodwill
Question 59.
A and B are partners. C is admitted with 1/5 share. C brings 7 1,20,000 as his share towards capital. The total net worth of the firm is :
(A) ₹ 1,00,000
(B) ₹ 4,00,000
(C) ₹ 1,20,000
(D) ₹ 6,00,000
Answer:
(D) ₹ 6,00,000
Question 60.
A and B share profits and losses in the ratio of 3:4. C was admitted for 1/5 th share. New profit sharing ratio will be:
(A) 3 : 4 : 1
(B) 12 : 16 : 7
(C) 16 : 12 : 7
(D) None of these
Answer:
(B) 12 : 16 : 7
Question 61.
The opening balance of Partner’s Capital Account is credited with:
(A) Interest on Capital
(B) Interest on Drawings
(C) Drawings
(D) Share in loss
Answer:
(A) Interest on Capital
Question 62.
Share of goodwill brought in cash by the new partner is called:
(A) Assets
(B) Profit
(C) Premium
(D) None of these
Answer:
(C) Premium
Question 63.
If the incoming partner brings the amount of goodwill in cash and also a balance exists in Goodwill A/c, then the Goodwill A/c is written off among the old partners:
(A) In new profit-sharing ratio
(B) In old profit-sharing ratio
(C) In sacrificing ratio
(D) In gaining ratio
Answer:
(B) In old profit-sharing ratio
Question 64.
A and B share profits and losses in the ratio of 3 : 1.C is admitted into partnership for 1/4 share. The sacrificing ratio of A and B is :
(A) Equal
(B) 3 : 1
(C) 2 : 1
(D) 3 :2
Answer:
(B) 3 : 1
Question 65.
A and B are partners sharing profites in the ratio of 3:1. They admit C for 1/4 share in future profits. The new profit sharing ratio will be:
Answer:
(A)
Question 66.
Formula of Sacrificing ratio is:
(A) New Ratio – Old Ratio
(B) Old Ratio – New Ratio
(C) Gain Ratio – Sacrificing Ratio
(D) New Ratio – Sacrificing Ratio .
Answer:
(B) Old Ratio – New Ratio
Question 67.
The accumulated profits and reserves are transferred to:
(A) Realisation A/c
(B) Partner’s Capital A/cs
(C) Bank A/c
(D) Savings A/c
Answer:
(B) Partner’s Capital A/cs
Question 68.
A, B and C are equal partners. D is admitted to the firm for non-ourth share. D brings ₹ 20,000 as capital and ₹ 5,000 being half of the premium for goodwill. The value of goodwill of the firm is :
(A) ₹ 10,000
(B) ₹ 40,000
(C) ₹ 30,000
(D) None of these
Answer:
(B) ₹ 40,000
Question 69.
On the admission ofa new partner, increase in the value of assets is debited to which account ?
(A) Revaluation Account
(B) Assets Account
(C) Old Partners’ Capital Accounts
(D) None of these
Answer:
(B) Assets Account
Question 70.
Z is admitted in a firm for a 1/4 share in the profit for which he brings 7 30,000 for goodwill. It will be taken away by the old partners X and Y in :
(A) Old profit-sharing ratio
(B) New prpfit-sharing ratio
(C) Sacrificing ratio
(D) Capital ratio
Answer:
(C) Sacrificing ratio
Question 71.
On the admission of a new partner, the decrease in the value of assets is debited to:
(A) Revaluation Account
(B) Assets Account
(C) Old Partners’ Capital Accounts
(D) None of these
Answer:
(A) Revaluation Account
Question 72.
When the new partner pays for goodwill in cash, the amount should be debited in the firm’s book to:
(A) Goodwill Account
(B) Cash Account
(C) Capital Account of new partner
(D) None of these
Answer:
(B) Cash Account
Question 73.
The balance of Revaluation Account or Profit & Loss Adjustment Account is transferred to Old Partners’ Capital Accounts in their :
(A) Old profit-sharing ratio
(B) New profit-sharing ratio
(C) Equal ratio
(D) Capital ratio
Answer:
(A) Old profit-sharing ratio
Question 74.
X and Y share profits in the ratio of 3:2 Z was admitted as a partner who gets 1/5 share. Z acquires 3/20 from X and 1/20 from Y. The new profit sharing ratio will be :
(A) 9 : 7 : 4
(B) 8 : 8 : 4
(C) 6 : 10 : 4
(D) 10 : 6 :4
Answer:
(A) 9 : 7 : 4
Question 75.
The opening balance of Partner’s Capital Account is credited with:
(A) Interest on Capital
(B) Interest on Drawings
(C) Drawings
(D) Share in loss
Answer:
(A) Interest on Capital
Question 76.
At the time of admission of a new partner, Undistributed Profits appeaming in the Balance Sheet of the old firm is transferred to the Capital Account of:
(A) Old partners is old profit-sharing ratio
(B) Old partners in new profit-sharing ratio
(C) All the partners in the new profit-sharing ratio
(D) None of these
Answer:
(A) Old partners is old profit-sharing ratio
Question 77.
Z is admitted in a firm for al/4 share in the profit for which he brings 7 30,000 for goodwill. It will be taken away by the old partners X and Y in :
(A) Old profit-sharing ratio
(B) New profit-sharing ratio
(C) Sacrificing ratio
(D) Capital ratio
Answer:
(C) Sacrificing ratio
Question 78.
General Reserval at the time of admission of a new partner is transferred to :
(A) Revaluation Account
(B) Old Partner’s Capital Account
(C) Profit and Loss Adjustment Account
(D) Realisation Account
Answer:
(B) Old Partner’s Capital Account