Deck 5: Accounting for Partnerships: Drawings, Goodwill, and Retirement

Question 1

Drawings of the partners are:

A)debited to profit & loss a/c
B)credited to profit & loss a/c
C)credited to capital a/c
D)debited to capital a/c

Answer 1

debited to capital a/c

Question 2

A partners has to pay interest on drawings what is the entry in the personal A/c of the partner?

A)credit partners capital a/c
B)credit partners current a/c
C)debit the partners current a/c
D)debit partners current a/c

Answer 2

debit partners current a/c

Question 3

Salary paid to partner should be:

A)debited to his current a/c
B)credited to his current a/c
C)credited to profit & loss appropriation a/c
D)none of above

Answer 3

none of above

Question 4

Interest on capital Account:

A)debited to profit & loss a/c
B)credit to profit & loss a/c
C)debit to profit & loss and credited to partners capital a/c
D)only credited to partners capital a/c

Question 5

At the time of admission of a new partner the firm is:

A)dissolved
B)continued
C)not effected
D)re-organized

Question 6

At the time of admission an incoming partner contributes as goodwill:

A)in cash
B)does not pay cash
C)may or may not pay cash for goodwill
D)none of these.

Question 7

Goodwill is valued as two years purchase of the average profits of three previous years are Rs. 15000, the value of goodwill be:

A)rs. 15000
B)rs. 30000
C)rs. 20000
D)rs. 50000

Question 8

Value of goodwill agreed upon Rs. 30000 on C, S admission and allowing him ¼ share of total profit Goodwill is brought in cash, the amount of goodwill be as:

A)rs. 30000
B)rs. 7500
C)rs. 150000
D)rs. 120000

Question 9

Goodwill of the firm is valued Rs. 30000. C an incoming partner purchase ¼ share of total profit Goodwill be raised in the books.

A)rs. 30000
B)rs. 7500
C)rs. 120000
D)rs. 7000

Question 10

An incoming partner pays his share of goodwill in cash, and profit sharing ration of old partner is changed, Goodwill be distributed among old partners:

A)as their old profit ratio
B)according to new ration
C)according to sacrifice ratio
D)none of these

Question 11

At the time of admission of a new partner, general reserve is:

A)debited to capital of old partners
B)credited to capital of old partners
C)allowed to remain is balance sheet
D)debited to current account

Question 12

A new partner may be admitted to a partnership:

A)with the consent of all partners
B)with the consent of two third of old partners
C)with the consent of any one of the partners
D)without consent of old partners

Question 13

At the time of a new partner Goodwill:

A)belongs to all partners, new and old
B)belongs only to the new partners who is going to be admitted
C)belongs only to the old partner who have credited it
D)none of the above.

Question 14

In the revaluation account a decrease in the value of plant and machinery:

A)appears on the debit side
B)appears on the credit side
C)appears on the debit side of good will account
D)does not appear at all

Question 15

In the revaluation account an increase in the value of land and building:

A)appears on the debit side
B)appears on the credit side
C)appears on the credit side of good will account
D)does not appear at all

Question 16

The partnership may come to an end due to the:

A)death of a partner
B)insolvency of partner
C)by giving notice
D)all of the above

Question 17

In case of retirement of a partner full good will is credited to the accounts of:

A)all partners
B)only retiring partner
C)only remaining partner
D)none of the above

Question 18

Revaluation account is operated to find out gain or loss at the time of:

A)admission of a partner
B)retirement of a partner
C)death of a partner
D)all of above

Question 19

Partners equity is effected due to:

A)retirement of a partner
B)admission of a partner
C)death of a partner
D)all of above

Question 20

The accounting procedure at the retirement of partner is valued:

A)revaluation of assets and liabilities
B)ascertaining his share of goodwill
C)finding the amount due to him
D)all of above

Question 21

If the remaining partner want to continue the business, after the retirement of a partner, a new partnership agreement:

A)necessary
B)not necessary
C)optioned
D)none of above

Question 22

An account operated to ascertain the loss or gain at the death of a partner is called:

A)realization account
B)revaluation account
C)execution account
D)deceased partner a/c

Question 23

Amount due to outgoing partner is shown in the balance sheet as his:

A)liability
B)asset
C)capital
D)loan

Question 24

The loss or gain an account of revaluation at the time of retirement of a partner is shared by:

A)remaining partners
B)retiring partner
C)all partners
D)none of above

Question 25

On the retirement of a partner any reserve being should be transferred to the capital account of:

A)all partners in the old profit sharing ratio
B)remaining partners in the new profit sharing ratio
C)neither the retiring partner, nor the remaining partner
D)none of above