163 Questions
| Total Attempts: 1097

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Questions and Answers

- 1.(i) Actual average profit Rs. 72,000 (ii) Normal rate of return 10% (iii) Assets Rs. 9,70,000 (iv) Current Liabilities Rs. 4,00,000 Goodwill according to capitalization method will be
- A.
Rs.1,50,000

- B.
Rs.1,40,000

- C.
Rs.1,60,000

- D.
None'of the three

- 2.A & B are equal partners with capitals of the Rs. 10,000 and Rs. 8,000 respectively. They admit C as a partner with 1/4th share in the profits of the firm. C brings Rs. 8,000 as his share of capital. Value of goodwill will be :
- A.
Rs.6000

- B.
Rs.5000

- C.
Rs.8000

- D.
None of the above

- 3.A & B are partners sharing profits and losses in the ratio 5:3. On admission, C brings Rs. 70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B and C are 7:5:4. The scarificing ratio among A:B will be
- A.
3:1

- B.
4:7

- C.
5:4.

- D.
2:1.

- 4.A and B are equal partners in a firm their capital shows credit balance of Rs. 18,000 and Rs.12,000 respectively. A new partner C is admitted with 1/5th share in profits. He brings Rs. 14,000 for his capital. Value of hidden goodwill at the time of C's admission will be
- A.
Rs. 26000

- B.
Rs. 25000

- C.
Rs. 20000

- D.
None of the three

- 5.A and B are partneers in a firm sharing profits and losses in the ratio of 3:2 .A new partner C is admitted A surrenders 1/5 th share of his profit in favour of C and B surrenders 2/5 th share of his profit in favour of C.New profit sharing ratio will be
- A.
12:6:7

- B.
12:5:6

- C.
12:4:5

- D.
None of the three

- 6.A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C as the new partner for 1/6th share in the profits. The firm goodwill was valued at Rs.1,50,000/-. For adjustment of goodwill, C's account will be debited by
- A.
Rs.20,000

- B.
Rs. 15.000

- C.
Rs.25,000

- D.
None of the three

- 7.A and B are partners in a firm. During the year 2006, A Withdrew Rs.1,000 p.m. and B withdraw Rs.500 p.m. on the first day of each month for personal use. Interest on drawings is to be charged @ 10% p.a. The interest on drawings will be
- A.
Rs.650

- B.
Rs.975

- C.
Rs.900

- D.
Rs. 1,800

- 8.A and B are partners sharing in the ratio of 3:2. C is admitted for 1/5th share and brings Rs. 15,000 as capital and necessary amount for his share of goodwill. The goodwill of the entire firm is valued Rs. at 60,000. Goodwill brought by C will be
- A.
Rs.12,000

- B.
Rs.10,000

- C.
Rs.15,000

- D.
None of the three

- 9.A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They have invested capitals of Rs.40,000 and Rs.25,000 respectively. As per the partnership deed, they are entitled to interest on capital @ 5% p.a. before dividing the profits. During the year, the firm earned a profit of Rs.3,900 before allowing interest. The net profits will be apportioned as
- A.
Rs.260 to A and Rs.390 to B

- B.
Rs.390 to A and Rs.260 to B

- C.
Rs.2,340 to A and Rs.1,560 to B

- D.
Rs.1,560 to A and Rs.2,340 to B

- 10.A and B are partners sharing profits and losses in the ratio of 3:2 having the capital of Rs. 80,000 and Rs. 50,000 respectively. They are entitled to 9% p.a. interest on capital before distributing the profits. During the year firm earned Rs. 7,800 after allowing interest on capital. Profits apportioned among A and B is
- A.
4,680 and 3,120

- B.
4,800 and 3,000

- C.
5,000 and 2,800

- D.
None of the above

- 11.A and B are partners sharing profits and losses in the ratio of 3:2 (A's Capital is Rs. 30,000 and B's Capital is Rs. 15,000). They admitted C agreed to give 1/5th share of profits to him. How much C should bring in towards his capital?
- A.
Rs.9,000

- B.
Rs.12,000

- C.
Rs.14,500

- D.
Rs.11,250

- 12.A and B are partners sharing profits in the ratio of 3:2 They admit C as a new partner for 3/10th share, which he acquires 2/10 from A and 1/10 from B. The new profit sharing ratio of A, B and C is
- A.
3:4:3

- B.
4:3:3

- C.
3:3:4

- D.
None of the three

- 13.A and B are partners sharing profits in the ratio of 3:2 with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p a. B is to be allowed an annual salary of Rs. 2,500 during 2000, the profits of the year prior to calculation of interest on capital but after charging B's salary amounted to Rs. 12,500. Manager is to be allowed a Commission of 5% of profits remaining after deducting salary and interest on capital but before charging such Commission, Profit transferred to partners Capital Accounts will be
- A.
A Rs. 4389 B Rs. 2926

- B.
A Rs. 4000 B Rs. 3315

- C.
A Rs. 3000 B Rs. 4315

- D.
A Rs. 2500 B Rs. 4815

- 14.A and B are partners sharing profits in the ratio of 3:2. C is admitted as a partner. The new profit sharing ratio among A, B and C is 5:3:2. Sacrificing ratio will be
- A.
1:1

- B.
3:2

- C.
2:3

- D.
None of the above

- 15.A and B are partners with capitals of Rs. 10,000 and Rs. 20,000 respectively and sharing profits equally. They admitted C as their third partner with one-fourth profits of the firm on the payment of Rs. 12,000. The amount of hidden goodwill is:
- A.
6,000

- B.
10,000

- C.
8,000

- D.
None of the above

- 16.A and B are partners with the capital Rs. 50,000 and Rs. 40,000 respectively. They share profits and losses equally. C is admitted on bringing Rs. 50,000 as capital only and nothing was bought against goodwill.Goodwill in balance sheet of Rs.20,000 is revalued as Rs.35,000.What will be value of goodwill in the books after the admission of C ?
- A.
Rs.55,000

- B.
Rs.35,000

- C.
Rs.20,000

- D.
Rs.15,000

- 17.A and B are partners, sharing profits in the ratio 5:3. They admit C with 1/5 share in profits, which he acquires equally from both i.e. 1/10 from A and 1/10 from B. Now profit sharing ratio will be
- A.
21:11:8

- B.
11:21:8

- C.
8:11:21

- D.
None of the three

- 18.A and B are partners, sharing profits in the ratio of 5:3. They admit C with 1/5 share in profits, which he acquires equally from both 1/10 from A and 1/10 from B. New profit sharing ratio will be
- A.
21:11:8

- B.
20:10:4

- C.
15:10:5

- D.
None of the three

- 19.A and B are partners. A's capital is Rs. 10,000 and B's capital is Rs. 6,000 Interest is payable @ 6% P.A. B is entitled to a salary of Rs.300 per month. Profit for the current year before interest and salary to B is Rs. 8,000. Profit between A and B will be divided
- A.
A RS.1720,B RS.1720

- B.
A RS.2000,B RS.1440

- C.
A RS.1440,B RS.2000

- D.
None of the above

- 20.A and D are equal partners. They wanted to admit C as 1/6th partner who brought Rs.60,000 as goodwill. The new profit sharing ratio is 3:2:1. Profit sacrificing ratio will be:
- A.
0:1/6

- B.
2:1

- C.
3:1

- D.
None of the above

- 21.A andBare partners sharing profits in the ratio of 4:1. A surrenders 1/4th of his share and B surrenders 1/2 of his share in favour of C, a new partner. Sacrificing ratio of A andBwill be
- A.
2:1

- B.
1:2

- C.
1:1

- D.
None'of the three

- 22.A firm earns profit of Rs.1,10,000. The normal rate of return in a similar type of business is 10%. The value of total assets (excluding goodwill) and total outside liabilities are Rs.11,00,000 and Rs.1,00,000 respectively. The value of goodwill is ( Capitalisation Method )
- A.
Rs.1,00,000

- B.
Rs.10,00,000

- C.
Nil

- D.
None of the above

- 23.A firm had an unrecorded investment of worth Rs.5,000. Entry in the firms journal on admission of a partner will be
(A) unrecovered investment A/c Dr .5000 To Revaluation A/c 5000 (B) Revaluation AIc Dr.5000 To unrecorded investment A/ c 5000 (C) partner capital a/c Dr.5000 To unrecorded investment A / c 5000 (D) None of the three.*Options :*- A.
A

- B.
B

- C.
C

- D.
D

- 24.A firm has on average profit of Rs.60,000. Rate of return on capital employed is 12.5% .p.a. Total capital employed in the firm was Rs.4,00,000. Goodwill on the basis of two years purchase of super profits is
- A.
Rs.20,000

- B.
Rs.15,000

- C.
Rs. 10,000

- D.
None of the above

- 25.A firm has on average profit of Rs.60,000; rate of return on capital employed is12.5%p.a.; total capital employed in the firm was Rs.4,00,000. Goodwill on the basis of two year's purchase of super profits is
- A.
Rs.15,000

- B.
Rs.10,000

- C.
Rs.20,000

- D.
None of the above

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