CUET 203 Accountancy Chapter 3 (Part 2) - Reconstitution of a partnership firm

Accountancy Chapter 3 (Part 2) – Reconstitution of a partnership firm – admission of a partner MCQ Question Answers for CUET 2023

1. Accounting Standard used by ICAI which deals with the treatment of Goodwill and its Applications

a.AS-16

b.AS-6

c.AS-21

d.AS-26

2. Question

a.d

b.b

c.a

d.c

3. Unrecorded assets are _________and Unrecorded liabilities are _______ to the revaluation account

a.Debited – credited

b.Deducted --added

c.Added--deducted

d.Credited --Debited

4. Excess of credit side over the debit side in Revaluation Account is:

a.Super Profit

b.Gross Profit

c.Average Profit

d.Net Profit

5. Firms’ capital includes partner’s capital and reserves and surplus but excludes__________.

a.Goodwill and Current Assets

b.Preliminary Expenses and Goodwill

c.Fictitious Assets and goodwill

d.Miscellaneous Expenditure and Goodwill

6. The excess of actual profits over the normal profits is termed as _________________.

a.Excess Normal Profits

b.Super Profits

c.Excess Profits

d.Over Profits

7. Sacrificing partners are credited with their share of goodwill and new partner is debited by the amount of goodwill not brought by him. This Situation only arises when __________

a.Goodwill does not exist in the books

b.New partner does not bring goodwill in cash, partly or full

c.New Partner brings goodwill in cash.

d.Partners decide to withdraw the amount of Goodwill

8. Which of following is Incorrect Regarding Goodwill?

a.It is valued Using a single Method and does not have any other alternative of measuring

b.It is as an intangible asset.

c.Amalgamation of partnership firms Can be a Reason for Valuation of Goodwill

d.It is the capitalised value attached to the differential profit capacity of a business

9. Any change in the existing agreement amounts to _________

a.Revaluation of the partnership firm

b.Remodulation of the partnership firm

c.Resolution of the partnership firm

d.Reconstitution of the partnership firm

10. At the time of admission of a new partner, general reserve appearing in the old balance sheet is transferred

a.none of the above

b.new partner’s capital account

c.old partner’s capital account

d.all partner’s capital account

11. Question

a.c

b.a

c.b

d.d

12. If, at the time of admission of a partner, any reserve and accumulated profits or losses exist in books of the firm, these should be transferred to old partner’s capital/current accounts in their _____

a.old profit-sharing ratio

b.Gain ratio

c.New Profit-Sharing Ratio

d.Sacrifice ratio

13. Sacrifice Ratio = __________

a.Old Ratio – New Ratio

b.Old Ratio + Gain Ratio

c.New Ratio + Old Ratio

d.New Ratio – Old Ratio

14. A new partner can be admitted into the firm only with the consent of all the _________unless otherwise agreed upon

a.Shareholders

b.Existing Partners

c.Partners

d.Members

15. __________ is brought by the new partner primarily to compensate the sacrificing partners for loss of their share in super profits of the firm

a.Debt

b.Additional Capital

c.Goodwill

d.Investments

16. Profit or Loss on Revaluation is to be Accepted by:

a.New Partners

b.All partners

c.New Partner

d.Old Partners

17. A business has earned average profits of Rs. 1,00,000 during the last few years and the normal rate of return in a similar business is 10%. Ascertain the value of goodwill by capitalisation average profits method, given that the value of net assets of the business is Rs. 8,20,000. Amount Of Goodwill?

a.Rs. 180000

b.Rs. 185000

c.Rs. 189500

d.Rs. 188000

18. Question

a.b

b.a

c.d

d.c

19. The profit for the five years of a firm are as follows – year 2013 Rs. 400000; year 2014 Rs. 400000; year 2015 Rs. 450000; year 2016 Rs. 445000 and year 2017 Rs. 500000. Calculate goodwill of the firm on the basis of 3 years purchase of 5 years average profits

a.1710000

b.1910000

c.1317000

d.1318000

20. Under this method, the goodwill is valued at agreed number of ‘years’ purchase of the average profits of the past few years.

a.Average Profits Method

b.Super Profits Method

c.Average Goodwill Method

d.Capitalisation Method