Accounting Multiple Choice Questions with answers | Download PDF for MCQs | Reconstitution of A Partnership

 MCQs BASED ON "Reconstitution of A Partnership Firms -Admission of A New Partner"

1. 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 is dissolved
(c) Old partnership is reconstituted
(d) None of these.

2. At the time of admission of a new partner general reserve appearing in the old Balance Sheet is transferred to :
(a) All Partner's Capital Accounts
(b) New Partner's Capital Accounts
(c) Old Partner's Capital Accounts
(d) None of these.

3. On the admission of a new partner increase in the value of assets is debited:
(a) Revaluation Account
(b) Assets Account
(c) Old Partners' Capital A/c
(d) None of these.

4. At the time of admission of a partner, undistributed profits appearing in the Balance Sheet of the old firm is transferred to the capital of:
(a) Old partners in old profit-sharing ratio
(b) Old partners in new profit sharing ratio
(c) All the partners in the new profit-sharing ratio.

5. Z is admitted in a firm for a 14 Shares in the profit for which he brings ₹ 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

6. On the admission of a new partner, the decrease in the value of assets debited to :
(a) Profit and Loss Adjustment Account
(b) Asset Account
(c) Old Partner's Capital Account
(d) Old Partners' Current Account

7. General reserve at the time of admission of a new partner is transferred to:
(a) Revaluation Account
(b) Old Partners' Capital Account
(c) Profit and Loss Adjustment Account
(d) Realisation Account

8. A, B and C are three partners sharing profits and losses in the ratio of 4 : 3 : 2 is a admitted for 110 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.

9. A and B are partners in a firm sharing profits in the ratio of 3 : 2. They admit C as a new partner for 13rd 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

10. X and Y are partners sharing profits in the ratio of 1 : 1. They admit Z for 15th share who, contributed ₹ 25,000 for his
share of goodwill. The value of goodwill of the firm will be:
(a) ₹ 2,50,000
(h) ₹ 50,000
(e) ₹ 1,00,000
(d) ₹ 1,25,000.

11. Profit or loss on revaluation is borne by:
(a) Old Partners
(b) New Partners
(c) All Partners
(d) None of the above.

12. 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.

13. Share of goodwill brought in cash by the new partner is called:
(a) Assest
(b) Profit
(c) Premium
(d) Loss

14. The balance of Revaluation Account or Profit and Loss Adjustment 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.

15. A new partner may be admitted to a partnership:
(a) Without the consent of old partners
(b) With the consent of all old partners
(c) With the consent of any one partner
(d) With the consent of 23rd of old partner.

16. On the admission of a new partner:
(a) Old firm has to be dissolved
(b) Old partnership has to be dissolved
(c) Both old firm and partnership have to be dissolved
(d) Neither partnership nor firm has to be dissolved.

17. When a new partner brings his share of goodwill in cash, the amount is debited to:
(a) Premium for Goodwill A/c
(b) Cash A/c
(c) Capital A/cs of old partners
(d) Capital A/c of new partner

18. When a new partner does not bring his share of goodwill in cash, the amount is debited to:
(a) Premium for Goodwill A/c
(b) Cash A/c
(c) Capital A/c of new partner
(d) Capital A/c of old partners

19. Goodwill brought in cash, will be shared by old partners in :
(a) Sacrificing ratio
(b) Capital ratio
(c) New profit sharing ratio
(d) Old profit sharing ratio

20. If at the time of admission, there is some unrecorded liability, it will be :
(a) Debited to Revaluation A/c
(b) Credited to Revaluation A/c
(c) Transfer to Old Partner's Capital A/cs
(d) Transfer to All Partner's Capital A/cs

21. The sacrifice of Old partners is equal to:
(a) Their new share
(b) Their old share
(c) New Share -Old Share
(d) Old Share-New share

22. Profit or loss on revaluation is transferred to Partner's Capital A/cs:
(a) Old
(b) New
(c) All
(d) Continuing

23. X, Y and Z are three partners sharing profits and losses in the ratio of 4 : 3 : 2. R is admitted for 110 th share, the new ratio will be-
(a) 10 : 7 : 7 : 4
(b) 5 : 3 : 2 : 1
(c) 4 : 3 : 2 : 1
(d) None of the above.

24. X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admit 2 as a new partner for 1/3rd share in the profits of the firm. The new profit sharing ratio of X, Y and Z would be:
(a) 3 : 2 : 1
b) 3 : 2 : 2
(c) 3 : 2 : 3
(d) 6 : 4 : 5

25. A and B are partners sharing profits in the ratio of 1 : 1. They admit C for 1/5th share who contributed ₹ 25,000 for his share of goodwill, The value of the goodwill of the firm will be:
(a) ₹ 2,50,000
(b) ₹ 50,000
(c) ₹ 1,00,000
(d) ₹ 1,25,000

26. X and Y are partners sharing profits in the ratio of 3 : 2. Z is admitted. Z gets 3/20th share from X and 1/20th share from Y. Calculate their sacrificing ratio. -
(a) 3 : 1
(b) 3 : 2
(c) 2 : 1
(d) 1 : 1

27. A and B are partners in a firm sharing profits and losses in the ratio of 2 : 1. They admit new partner C for 1/6th share in profits. What will be the new profit sharing ratio of A, B and C:
(a) 5 : 3 : 2
(b) 2 : 1 : 3
(c) 2 : 1 : 1
(d) 10 : 5 : 3

28. X, Y, Z are partners sharing profits in the ratio of 4 : 3 : 2. W is admitted 1/3rd share in future profits. What will be the sacrificing ratio?
(a) 2 : 1 : 1
(b) 4 : 3 : 2
(c) 2 : 3 : 4
(d) 3 : 4 : 5

29. A and B are partners sharing profits in the ratio of 2 : 1. They admit C into the firm for 1/4th share in profits for which he brings in 10,000 as his share of capital. The adjusted capitals of A & B will be-
(a) ₹ 20,000 & ₹ 10,000 respectively
(b) ₹ 30,000 & ₹ 15,000 respectively
(c) ₹ 30,000 & ₹ 20,000 respectively
(d) ₹ 20,000 & ₹ 20,000 respectively.

30. X and Y share profits in the ratio of 5 : 3. Z is admitted for 1/5th share. What will be the new profit sharing ratio?
(a) 5 : 3 : 1
(b) 5 : 3 : 2
(c) 10 : 8 : 4
(d) 4 : 3 : 2

31. X and Y are two partners in a firm sharing profits in the ratio of 5 : 3. Z is admitted in the firm as a partner with 1/4th share which he acquires equally from X & Y. What will he the new profit sharing ratio?
(a) 5 : 3 : 1
(b) 3 : 2 : 1
(c) 2 : 1 : 1
(d) 5 : 3 : 2

32. X and Y are partners sharing profits in the ratio of 5 : 3. X surrenders 1/5 of his share and Y surrenders 1/3 of his share in favor of Z, a new partner. Sacrificing ratio of X & Y will he -
(a) 2 : 1
(b) 1 : 1
(c) 3 : 2
(d) 5 : 3

33. A and B are partners sharing profits in the ratio of 5 : 3. They admit C into partnership 11 1/6th share of profits which
he acquires equally from A & B. New profit sharing ratio of A, B & C will be—
(a) 5 : 3 : 2
(b) 5 : 3 : 1
(c) 13 : 7 : 4
(d) 6 : 7 : 3

34. X and Y are partners in a firm having capital balances ₹ 1,08,000 and ₹ 72,000 respectively. They admit Z into partnership for 1/3rd share and Z is to bring proportionate amount of capital. The capital amount of Z will be—
(a) ₹ 22,500
(b) ₹ 90,000
(c) ₹ 1,80,000
(d) ₹ 54,000

35. A and B are partners in a firm with capitals of ₹ 90,000 and ₹ 1,00,000. C was admitted for 1/3rd share in profits and brings ₹ 1,70,000 as capital. Calculate the amount of Goodwill—
(a) ₹ 1,50,000
(b) ₹ 1,80,000
(c) ₹ 90,000
(d) ₹ 2,00,000

36. If there is an increase in the values of Building of ₹ 10,000, the Journal Entry will be—
₹ ₹
(a) Building A/c Dr. 10,000
To Revaluation A/c 10000
(b) Revaluation A/c Dr. 10,000
To Building A/c 10,000
(c) Building A/c Dr. 10,000
To P & L A/c 10,000
(d) No Entry.

37. If there is a decrease of ₹ 6,000 in the value of creditors, the Journal Entry will be.—
₹ ₹
(a) Revaluation A/c Dr. 6,000
To Creditors A/c 6,000
(b) P & L A/c Dr. 6,000
To Creditors A/c 6,000
(c) Creditors A/c Dr. 6,000
To Revaluation A/c 6,000
(d) No Entry.


Instruction: In the following questions there is a paragraph followed by five questions. You have to mark correct alternative from the option given in those questions:

38. Sita and Ram are partners sharing profits and losses in the ratio of 2 : 1. Mohan is to be admitted as new partner for 1/4th share in profit. Total profit of the firm will be ₹ 5,00,000 and goodwill ₹ 10,000.
You have to calculate
    (1). Total profit of firm is:
    (a) ₹ 5,00,000
    (b) ₹ 2,10,000
    (c) ₹ 3,00,000
    (d) ₹ 5,90,000

    (2). Share of new partner in the firm.
    (a) ₹ 6,00,000
    (b) ₹ 1,00,000
    (c) ₹ 10,000
    (d) ₹ 5,10,000

    (3). Remaining profit after deducting new partner's share is if total profit is 1
    (a) 24
    (b) 34
    (c) 25
    (d) 35

    (4). Share of Raja, after admission of Mohan in firm :
    (a) ₹ 2,00,000
    (b) ₹ 6,00,000
    (c) ₹ 10,00,000
    (d) ₹ 2,00,000

    (5). New profit-sharing ratio will be:
    (a) 2 : 1 : 1
    (b) 1 : 1 : 2
    (c) 2 : 1 : 2
    (d) 1 : 2 : 2

39. At the time of distribution of goodwill brought in by the new partner, but partner's capital accounts are……………
(a) Debit
(b) Credit
(c) None of the above

40. At the time of withdrawing goodwill by the old partners, which is brought in by the new partner, the capital accounts of the old partners are…………..
(a) Debit
(b) Credit
(c) None of the above

Answers to admission of a partner
1. C
2. B
3. B
4. A
5. C
6. A
7. B
8. C
9. D
10. D
11. A
12. B
13. C
14. A
15. B
16. B
17. B
18. A
19. A
20. A
21. D
22. A
23. C
24. D
25. D
26. A
27. D
28. B
29. A
30. B
31. C
32. B
33. C
34. B
35. A
36. A
37. C
38. (1) a
    (2) b
    (3) b
    (4) d
    (5) a
39. B
40. A

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