P, Q and R are partners sharing the profits in a ratio of 4:3:1

P, Q and R are partners sharing the profits in a ratio of 4:3:1

Question 4. P withdraws and his share is taken by Q and R equally. Calculate the new profit sharing ratio of Q and A ………………… (a) 1:1 (b) 4:3 (c) 3:4 (d) 5:3 Answer: (d) 5: 3

In the event of the death of a partner, all of the sums credited to his capital account are transferred to …………………. (a) All partners’ capital accounts (b) Other partners’ capital accounts (c) His executor’s account (d) Government revenue account Answer: (c) His executor’s account

Question 6. A, B and C share the profits in the ratio (frac ) : (frac ) : (frac ) C dies. The winning ratio of A and B will be ………………….. (a) 1:1 (b) 1:3 (c) 5:3 (d) 3:1 Answer: (c) 5: 3

Question 7. Upon the retirement of a partner, the equity accounts of the continuing partner are debited with the departing partner’s share of goodwill in (a) Former Profit Sharing Ratio (b) Win ratio (c) New profit sharing ratio (d) Equal ratio Answer: (b) Win ratio

Question 8. N, S and K shared the profits in a ratio of 3:5:7. K withdraws and his share is taken by N and S in the ratio of 3:2, the new ratio will be (a) (b) 3:5 (c) 2:1 (d) 3:2 Answer: (a)

Question 9. If, at the time of retirement, there is an unrecorded liability, it be ………………….. (a) Debited at Revaluation A/c (b) Credited at Revaluation A/c (c) Transferred to Former Partners Capital A/C (d) Transferred to All Partners Capital A/C Answer: (a) Debited at revaluation A/c

Question 10. The gain of the remaining partners is equal to …………………. (a) Their new share (b) Their old share (c) New share – Old share (d) Old share – New share Answer: (c) New share – Old share

Question 11. Which of the following is debited from the partner capital when a partner retires? (a) General reserve (b) Revaluation profit (c) Cumulative losses (d) Cumulative profits Answer: (c) Cumulative losses

Question 12. Upon retirement, of a partner, the workers’ compensation reserve after satisfying the legal requirement is transferred to (a) Revaluation account (b) Capital account of all the partner (c) Sacrifice capital A/cs of partner (d) Former partner Capital account response: (b) Capital account of all partners

Question 13. On retirement of a partner, an increase in the value of assets is recorded in ……………….. (a) Revaluation A/c (b) Cash a/c (c) Capital of former partner A/c (d) None of the above Answer: (a) Reassessment A/c

Question 14. Retained earnings and losses – transferred to all partners upon retirement of a partner …………………. (a) should be (A) should not be (c) maybe Answer: (a) should be

Question 2. What is the winning rate? Answer: The win ratio is the proportion of the profit that is won by the continuing partner. Win ratio = Share ratio won by continuing partners. Share gained = New share – Old share

Question 8. Sunil, Sumathi and Sundari are profit sharing partners in a ratio of 3:3:4. Sundari retires and his part is fully taken over by Sunil. Calculate the new profit share ratio and win ratio. Answer: New ratio – Old ratio Sunil = (frac ) + (frac ) = (frac ) (Sundari share is added to old ratio) Sumathi = (frac ) New Ratio = 7:3 Sacrifice Ratio = 1:1

issue 5

John retires on 1 st , subject to the following conditions: (i) Appreciate construction by 10% (ii) Stock to depreciate by 5% (iii) Provide? 1,000 for bad debts (iv) An unrecorded liability of ? 8,000 have been notified (v) Outgoing partner must be paid immediately Prepare revaluation account, partners capital account and company balance sheet after retirement.

Question 3. Profit and loss account credit balance – appearing on the balance sheet on the death of a partner is credited to ………………… (a) Capital account of the deceased partner (b) Capital account of any partner (including capital account of deceased partner capital account (c) remaining capital account of partner (d) none of the above Answer: (b) capital account of all partners (including including the capital account of the deceased partner)