Review each question and reveal answers to strengthen your understanding
1A firm has an average profit of ₹ 60,000 Rate of return on capital employed is 12.5% p.a. Total capital employed in the firm was ₹ 4,00,000. Goodwill on the basis of two years purchase of super profit is :
✅ Correct Answer: 1
2Under capitalisation method, goodwill is calculated by :
✅ Correct Answer: 4
3“Goodwill is nothing more than probability that the old customer will resort to the old place.†This definition of goodwill was given by :
✅ Correct Answer: 3
4What will be the value of goodwill at twice the average of last three years profit if the profits of the last three years were ₹ 4,000, ₹ 5,000 and ₹ 6,000 ?
✅ Correct Answer: 2
5The Valuation of Goodwill is not necessary in Sole Trading:
✅ Correct Answer: 4
6The first book of original entry is-
✅ Correct Answer: 2
7‘Drawings’ falls under which account-
✅ Correct Answer: 1
8Income tax is treated as-
✅ Correct Answer: 4
9A cheque on which two parallel lines are drawn in the left top corner is called –
✅ Correct Answer: 3
10Cash purchase of goods is recorded in-
✅ Correct Answer: 3
11Credit purchase of furniture shall be recorded in-
✅ Correct Answer: 2
12Who prepares a debit note-
✅ Correct Answer: 1
13Return of goods by a customer is recorded in-
✅ Correct Answer: 3
14On retirement of a partner’s the amount of General Reserve is transferred to all partner’s capital account in:
✅ Correct Answer: 3
15x,y are z are partners and share profits in the ratio of 5 : 3 : 2. y retires and x takes 1/10 from y and z takes 1/5 from y. The new profit sharing ratio will be :
✅ Correct Answer: 3
16The old profit-sharing ratio among Rajender, Satish and Tejpal were 2 : 2 : 1. The new profit-sharing ratio after Satish’s retirement is 3 : 2. The gaining ratio is :
✅ Correct Answer: 3
17The amount due to the deceased partner is paid to his……….
✅ Correct Answer: 4
18In case of death of a partner, the whole amount standing to the credit of his capital account is transferred to :
✅ Correct Answer: 3
19On the death of a partner in a firm payments are made to;
✅ Correct Answer: 2
20The executors of deceased partner will be paid interest on the amount due from the date of death of the partner at:
✅ Correct Answer: 2
21In the event of death of a partner, the accumulated profits and losses are shared by the partners in their:
✅ Correct Answer: 1
22On the death of a partner, the amount of Joint Life Insurance Policy is credited to the Capital Accounts of:
✅ Correct Answer: 2
23On death of a partner, the remaining partner(s) who have gained due to change in profit-sharing ratio should compensate the:
✅ Correct Answer: 1
24B, C and D are partners sharing profit in the ratio 7:5:4. D died on 30th June, 2016 and profits for the year 2015-16 were ₹ 12,000. How much share in profits for the period 1st April, 2016 to 30th June, 2016 will be credited to D’s Account:
✅ Correct Answer: 2
25A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1. C died on 31st March, 2016. The profits of the financial year ending 31st March, 2016 is ₹ 64,000. The share of the deceased partner in the profits will be:
✅ Correct Answer: 2
26JLP of the partners is a/an…………..account
✅ Correct Answer: 4
27Joint Life Policy amount received by a firm is distributed in:
✅ Correct Answer: 3
28A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. They had a Joint Life Policy of ₹ 3,00,000. Surrender value of JLP in Balance Sheet is ₹ 90,000. C dies what is share of each partner in JLP ?
✅ Correct Answer: 3
29X, Y and Z are partners sharing profits in the ratio of 7 : 5 :4. On 30th June, 2015 Z died and profits for the year ending 31st March, 2016 were ₹ 2,40,000. How much share in profits for the period 1st April to 30th June, 2015 will be credited to Z’s account assuming the profit occurred evenly throughout the year ;
✅ Correct Answer: 2
30Revaluation Account is prepared at the time of …………
✅ Correct Answer: 4
31As per section 37 to the Indian Partnership Act, 1932, the executors would be entitled at their choice to interest calculated from the date of death till the date of payment on the final amount due to the deceased partner at………..percent per annum.
✅ Correct Answer: 3
32X, Y and Z are the partners sharing profits in the ratio 2 : 1 : 1. Firm has a joint life policy of ₹ 1,20,000 and in the balance sheet it is appeaming at the surrender value, i.e., ₹ 20,000. On the death of X how this JLP will be distributed among partners:
✅ Correct Answer: 2
33On death of a partner, the firm gets for joint life policy taken for all partners.
✅ Correct Answer: 1
34A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1. On 1.3.2016 C died. The average profits of the firm for last four years were ₹ 72,000 Books are closed on 31st December. C’s share of profit till the date of his death will be:
✅ Correct Answer: 1
35A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1. C dies and goodwill of the firm is valued at ₹ 60,000. The amount payable to the executor’s of the deceased partner will be :
✅ Correct Answer: 3
36M, L and A are partners sharing profits in the ratio of 9:4:3. They have taken a joint life policy of ₹ 96,000. A dies. What is the share of A in the JLP amount ?
✅ Correct Answer: 1
37Which account is prepared at the time retirement or death of a partner to show the changes in the value of assets and liabilities:
✅ Correct Answer: 1
38What are the methods of calculating share of the deceased partner in the profit of the firm upto the date of death:
✅ Correct Answer: 3
39If three partners A, B & C are sharing profits as 5:3:2, then on the death of a partner A, how much B & C will pay to A’s executor on account of goodwill ? Good-will is to be calculated on the basis of 2 years purchase of last 3 years average profits. Profits for the last three years are 10,80,000 Rs. :
✅ Correct Answer: 4
40On death of a partner, his excutor is paid the profits of
the deceased partner for the relevant period. This payment is recorded in Profit & Loss A/c :
✅ Correct Answer: 3
41On the retirement of a partner any accumulated profit should be credited to the capital accounts of:
✅ Correct Answer: 1
42On the retirement of a partner, full amount of goodwill may be credited to the capital accounts of:
✅ Correct Answer: 3
43Outgoing partner is compensated for parting with firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation in:
✅ Correct Answer: 1
44Gaining ratio is calculated :
✅ Correct Answer: 2
45How unrecorded assets are treated at the time of retriement of a partner ?
✅ Correct Answer: 1
46On the retirement of a partner, profit on revaluation of assets and liabilities should be credited to the Capital Accounts of:
✅ Correct Answer: 1
47On retirement of a partner, the retiring Partner’s Capital Account will be credited with:
✅ Correct Answer: 1
48Joint life policy be taken by the firm on the lives of:
✅ Correct Answer: 4
49A, Band Care equal partners in a firm. B retires and the remaining partners decide to share profits of the new firm in the ratio of 5 : 4. Gaining ratio will be:
✅ Correct Answer: 1
50The amount of General Reserve is transferred to all partner’s capital accounts in: