Accountancy Chapter 3 (Part 2) – Reconstitution of a partnership firm – admission of a partner MCQ Question and Answers – MCQs for Practice

1. Any change in the existing agreement amounts to _________

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

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

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

5. Question

6. Sacrifice Ratio = __________

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

8. 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

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

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

11. 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?

12. Question

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

14. Which of following is Incorrect Regarding Goodwill?

15. 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 __________

16. 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 _____

17. Question

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

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

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