CA.Ajay Rathi’s ANSHU CLASSES LGF-2, BASEMENT, side building ICAI, Ghaziabad 9311672447, 7428281471 Accounts Test Partnership Account & Partnership Act Name………………. Maximum Marks: 60 Time Allotted: 100 min By - CA. Ajay Rathi PARTNERSHIP ACCOUNT PART --I 1. A and B are partners sharing profits and losses in the ratio 5:3. They admitted C and agreed to give him 3/l0th of the profit. What is the new ratio after Cs admission? (a) 35 : 42 : 17. (b) 35 : 21 : 24. (c) 49 : 22 : 29. (d) 34 : 20 : 12. 2. A and B are partners sharing profits in the ratio 5:3, they admitted C giving him 3/l0th share of profit. If C acquires l/5th share from A and Ijl0th from B, new profit sharing ratio will be: (a) 5 : 6 : 3. (b) 2 : 4 : 6. (c) 18 : 24 : 38. (d) 17 : 11 : 12 3. C was admitted in a firm with 1 j 4th share of the profits of the firm. C contributes Rs. 15,000 as his capital, A and B are other partners with the profit sharing ratio as 3:2. Find the required capital of A and B, if capital should be in profit sharing ratio taking Cs as base capital: (a) Rs. 27,000 and Rs. 16,000 for A and B respectively. (b) Rs. 27,000 and Rs. 18,000 for A and B respectively. (c) Rs. 32,000 and Rs. 21,000 for A and B respectively. (d) Rs. 31,000 and Rs. 26,000 for A and B respectively. 4. A, Band C are partners sharing profits and losses in the ratio 6:3:3, they agreed to take D into partnership for 1/8th share of profits. Find the new profit sharing ratio. (a) 12 : 27 : 36 : 42. (b) 14 : 7 : 7 : 4. (c) 1 : 2 : 3 : 4. (d) 7 : 5 : 3 : 1. 5. X and Yare partners sharing profits in the ratio 5:3. They admitted Z for 1/5th share of profits, for which he paid Rs. 1,20,000 against capital and Rs. 60,000 against goodwill. Find the capital balances for each partner taking Zs capital as base capital. (a) 3,00,000; 1,20,000 and 1,20,000. (b) 3,00,000; 1,20,000 and 1,80,000. (c) 3,00,000; 1,80,000 and 1,20,000. (d) 3,00,000; 1,80,000 and 1,80,000. 6. A and B are partners sharing profits and losses in the ratio of 3:2 (As Capital is Rs. 30,000 and Bs 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. 7. A and B are partners sharing the profit in the ratio of 3 : 2. They take C as the new partner, who brings in Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1 : 1 : 1. In what ratio will this amount will be shared among the old partners A & B. (a) 8,000:2,000. (b) 5,000:5,000. (c) Old partners will not get any share in the goodwill bought in by C. (d) 6,000:4,000. 8. A and B are partners sharing the profit in the ratio of 3 : 2. They take C as the new partner, who is opposed to bring Rs. 25,000 against capital & Rs. 10,000 against goodwill. New profit sharing ratio is 1 : 1 : 1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm. (a) A and B will share goodwill bought by C as 4,000:1,000. (b) Goodwill will be raised to Rs. 15,000 in old profit sharing ratio. (c) Both. (d) None. 9. A and B are partners sharing the profit in the ratio of 3 : 2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1 : 1 : 1. C is able to bring only his share of Capital. How this will be treated in the books of the firm. (a) A and B will share goodwill bought by C as 4,000 : 1,000. (b) Goodwill will be raised to Rs. 30,000 in old profit sharing ratio. (c) Both. (d) None. 10. A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm. (a) Cash bought in by C will only be credited to his capital account. (b) Goodwill will be raised to full value in old ratio. (c) Goodwill will be raised to full value in new ratio. (d) Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and Bs account in sacrificing ratio. 11. Profit or loss on revaluation is shared among the partners in ……………. Ratio. (a) Old Profit Sharing. (b) New Profit Sharing. (c) Capital. (d) Equal. 12. Amit and Anil are partners of a partnership firm sharing profits in the ratio of 5:3 respectively. Atul was admitted on the following terms: Atul would pay Rs. 50,000 as capital and Rs. 16,000 as Goodwill, for 1/5th share of profit. Machinery would be appreciated by 10% (book value Rs. 80,000) & building would be depreciated by 20% (Rs. 2,00,000). Unrecorded debtors of Rs. 1,250 would be bought into books now and a creditors amounting to Rs. 2,750 died and need not to pay anything to its estate. Find the distribution of profit/loss on revaluation between Amit, Anil and Atul. (a) Loss - 17,500 : 10,500 : 0. (b) Loss - 14,000 : 8,400 : 5,600. (c) Profits - 17,500 : 10,500 : 0. (d) Profits - 14,000 : 8,400 : 5,600. 13. A and B, who share profits and losses in the ratio of 3:2 has the following balances: Capital of A Rs. 50,000; Capital of B Rs. 30,000; Reserve Fund Rs. 15,000. They admit C as a partner, who contributes to the firm Rs. 25,000 for 1/6th share in the partnership. If C is to purchase 1/ 6th share in the partnership from the existing partners A and B in the ratio of 3:2 for Rs. 25,000, find closing capital of C. (a) Rs. 25,000. (b) 19,000 (c) Rs. 20,000 (d) Rs. 18,000. 14. Amit and Anil are partners of a partnership firm sharing profits in the ratio of 5:3 with capital of Rs. 2,50,000 & Rs. 2,00,000 respectively. Atul was admitted on the following terms: Atul would pay Rs. 50,000 as capital and Rs. 16,000 as Goodwill, for 1/5th share of profit. Find the balance of capital accounts after admission of Atul. (a) 2,60,000: 2,06,000: 50,000. (b) 2,20,000:1,82,000:66,000. (c) 2,92,500: 2,25,500: 50,000. (d) 2,82,500:2,19,500:66,000. 15. A and B shares profit and losses equally. They admit C as an equal partner and assets were revalued as follow: Goodwill at Rs. 30,000 (book value NIL). Stock at Rs. 20,000 (book value Rs. 12,000); Machinery at Rs. 60,000 (book value Rs. 55,000). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. Find the profit/loss on revaluation to be shared among A, Band C. (a) 21,500 : 21,500 : 0. (b) 6,500 : 6,500 : 0. (c) 14,333 : 14,333 : 14,333. (d) 4,333 : 4,333 : 4,333. 16. A and B shares profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. What will be the final effect of goodwill in the partners capital account? (a) A & Bs account credited with Rs. 5,000 each. (b) All partners account credited with Rs. 10,000 each. (c) Only Cs account credited with Rs. 10,000 as cash bought in for goodwill. (d) Final effect will be nil in each partner. 17. A and B shares profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital account. (a) 31,500 : 31,500 : 20,000. (b) 31,500 : 31,500 : 30,000. (c) 500 : 26,500 : 30,000. (d) 20,000 : 20,000 : 20,000. 18. Balance sheet prepared after the new partnership agreement, assets and liabilities are recorded at: (a) Original Value. (b) Revalued Figure. (c) At realisable value. (d) At current cost. 19. P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any). (a) 3,000 : 1,500. (b) 6,000 : 3,000. (c) NIL. (d) None of the above. 20. P & Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share & pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P & Q. If profit on revaluation is Rs. 6,000 and opening capital of P is Rs. 40,000 and of Q is Rs. 30,000, find the closing balance of each capital. (a) 47,000:33.500:20,000. (b) 50,000:35,000:20,000. (c) 40,000:30,000:20,000. (d) 41,000:30,500:29,000. 21. Adam, Brain and Chris were equal partners of a firm with goodwill Rs. 1,20,000 shown in the balance sheet and they agreed to take Daniel as an equal partner on the term that he should bring Rs. 1,60,000 as his capital and goodwill, his share of goodwill was evaluated at Rs. 60,000 and the goodwill account is to be written off before admission. What will be the treatment for goodwill? (a) Write off the goodwill of Rs. 1,20,000 in old ratio. (b) Cash bought in by Daniel for goodwill will be distributed among old partners in sacrificing ratio. (c) Both. (d) None. 22. Which of the following asset is compulsory to revalue at the time of admission of a new partner: (a) Stock. (b) Fixed Assets. (c) Investment. (d) Goodwill. 23. X and Yare partners sharing profits in the ratio of 3 : 1. They admit Z as a partner who pays Rs. 4,000 as Goodwill the new profit sharing ratio being 2 : 1 : 1 among X, Y and Z respectively. The amount of goodwill will be credited to : (a) X and Y as Rs. 3,000 and Rs. 1,000 respectively. (b) X only (c) Y only. (d) None of the above. PART --II 1. A, B and C are partners sharing profits and losses in the ratio 9:4:3. They took joint life policy of Rs. 25,000 for A, Rs. 20,000 for Band Rs. 51,000 for C. What is the share of C in the JLP amount? (a) Rs. 18,000. (b) Rs. 25,000. (c) Rs. 51,000. (d) Rs. 20,000. 2. The Balance in the retiring or deceased partners capital account is transferred to the capital account in the profit sharing ratio. (a) Solvent Partners. (b) Insolvent Partners. (c) Remaining Partners. (d) New Partners. 3. In the absence of proper agreement, representative of the des eased partner is entitled to the Dead partners share in the following items. (a) Profits till date, goodwill, joint life policy, interest on capital, share in revalued assets and liabilities. (b) Capital, goodwill, joint life policy, interest on capital, share in revalued assets and liabilities. (c) Capital, profits till date, goodwill, interest on capital, share in revalued assets and liabilities. (d) Capital, profits till date, goodwill, joint life policy, share in revalued assets and liabilities. 4. As per Section 37 of the Indian Partnership Act, 1932, the executors would be entitled at their choice to the interest calculated from the date of death till the date of payment on the final amount due to the dead partner at percentage per annum. (a) 7. (b) 4. (c) 6. (d) 12. 5. A, B and C are the partners sharing profits and losses in the ratio 2:1:1. Firm has a joint life policy of Rs. 1,20,000 and in the balance sheet it is appearing at the surrender value i.e. Rs. 20,000. On the death of A, how this JLP will be shared among the partners. (a) 50,000:25,000:25,000. (b) 60,000:30,000:30,000. (c) 40,000:35,000:25,000. (d) Whole of Rs. 1,20,000 will be paid to A. 6. R, J and D are the partners sharing profits in the ratio 7:5:4. D died on 30th June 2006. It was decided to value the goodwill on the basis of three years purchase of last five years average profits. If the profits are Rs. 29,600; Rs. 28,700; Rs. 28,900; Rs. 24,000 and Rs. 26,800. What will be Ds share of goodwill? (a) Rs. 20,700. (b) Rs. 27,600. (c) Rs. 82,800. (d) Rs. 27,000. 7. R, J and D are the partners sharing profits in the ratio 7:5:4. D died on 30th June 2006 and profits for the accounting year 2005-2006 were Rs. 24,000. How much share in profits for the period 1st April 2006 to 30th June 2006 will be credited to Ds Account. (a) Rs. 6,000. (b) Rs. 1,500. (c) Nil. (d) Rs. 2,000. 8. If 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 As executer on account of goodwill. Goodwill is to be calculated on the basis of 2 years purchase of last 3 years average profits. Profits for last three years are: Rs. 3,29,000; Rs. 3,46,000 and Rs. 4,05,000. (a) Rs. 2,16,000 & Rs. 1,42,000. (b) Rs. 2,44,000 & Rs. 2,16,000. (c) Rs. 3,60,000 & Rs. 3,60,000. (d) Rs. 2,16,000 & Rs. 1,44,000. 9. To provide funds to pay to the retiring partner or to the representatives of a deceased partner, generally partners: (a) Create a Sinking Fund. (b) Create Joint Life Policy. (c) Create Reserve Fund. (d) Create a separate Bank Account. 10. At the time of death of a partner, firm gets from the insurance company against the Joint Life Policy taken jointly for all the partners. (a) Policy Amount. (b) Surrender Value. (c) Policy Value for the dead partner and Surrender Value for the rest. (d) Surrender Value for all the partners. 11. At the time of death of a partner, firm gets from the insurance company against the Joint Life Policy taken severely for each of the partner. (a) Policy Amount. (b) Surrender Value. (c) Policy Value for the dead partner and Surrender Value for the rest. (d) Surrender Value for all the partners. 12. When premium paid on JLP taken up severely for each partner, the amount received on death of a partner would be firms profit. It is also necessary to credit Partners Capital Account with -------------- of the policy on the lives of the remaining partners. (a) Policy Value. (b) Lump-sum Value. (c) Surrender Value. (d) Actual Value. 13. All of the following except one is the method of recording joint life policy. (a) Premium paid charged to revenue. (b) JLP Account maintained at the surrender value. (c) JLP Account maintained at the surrender value along with the Reserve. (d) Surrender value distributed among the partners in the profit sharing ratio. 14. A, B and C takes a Joint Life Policy their profit sharing ratio is 2:2:1. On death of B, A and C decides to share profits equally. They had taken a Joint Life Policy of Rs. 2,50,000 with the surrender value Rs. 50,000. What will be the treatment in the partners capital account on receiving the JLP amount if joint life policy is maintained at the surrender value? (a) Rs. 50,000 credited to all the partners in old ratio. (b) Rs. 2,50,000 credited to all the partners in old ratio. (c) Rs. 2,00,000 credited to all the partners in old ratio. (d) No treatment is required. 15. A, B and C takes a Joint Life Policy, their profit sharing ratio is 2:2:1. On death of B, A and C decides to share profits equally. They had taken a Joint Life Policy of Rs.2,50,000 with the surrender value Rs. 50,000. What will be the treatment in the partners capital account on receiving the JLP amount if joint life policy is maintained at surrender along with the reserve? (a) Rs. 2,50,000 credited to all the partners in old ratio. (b) Rs. 2,00,000 credited to all the partners in old ratio. (c) Distribute JLP Reserve Account in old profit sharing ratio. (d) B and c. 16. On death of a partner, his executor is paid the share of profits of the dying partner for the relevant period. This payment is recorded in Profit & Loss ----------------- Account. (a) Adjustment. (b) Appropriation. (c) Suspense. (d) Reserve. 17. A, B and C are the partners sharing profits and losses in the ratio of 5:3:2, took a joint life policy of Rs. 30,000. On the death of B what amount will be payable to each partner. (a) A - Rs. 22,000 and B - Rs. 8,000. (b) A - Rs. 14,000 and B - Rs. 16,000. (c) A - Rs. 15,000, B - Rs. 9,000 and C - Rs. 6,000. (d) A - Rs. 10,000, B - Rs. 8,000 and C - Rs. 10,000. PART --III 1. Following are the essential elements of a partnership firm except: (a) At least two persons. (b) There agreement between all partners. (c) Equal share of profits and losses. (d) Partnership agreement is for some business. 2. Following is the difference between partnership deed and partnership agreement. (a) Partnership deed is in writing and partnership agreement is oral. (b) Partnership deed is signed by all the partners but partnership agreement is signed by majority of the partners. (c) Partnership deed is registered in the court of law whereas partnership agreement is not registered. (d) Partnership deed is not subject to changes unless all partners agree to it. Partnership agreement can be amended with the consent of more than 50% partners. 3. Following are the difference between Account Current and Current Account except. (a)Account Current is prepared by a creditor to his debtor. Current Account is prepared for the partners of a firm. (b) Account Current records all the transactions between the supplier and customer. Current Account records all the transactions between the firm and partners. (c) Account Current is a statement. Current Account is an account. (d) Account Current is not the part of the books of accounts. Current Account is part of the books of accounts. 4. In the absence of any agreement, partners are liable to receive interest on their Loans @____ (a) 12% Simple Interest. (b) 12% Compounded Annually. (c) 6% Simple Interest. (d) 6% p.a. Simple Interest. 5. A partner acts as for a firm. (a) Agent. (b) Third Party. (c) Employee. (d) None of the Above. 6. Bill and Monica 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 before allowing any interest on capital. Profits apportioned among Bill and Monica is: (a) 4,680 and 3,120. (b) 4,800 and 3,000. (c) 5,000 and 2,800. (d) None of the above. 7. Ram and Shyam are partners with the capital of Rs. 25,000 and Rs. 15,000 respectively. Interest payable on capital is 10% p.a. Find the interest on capital for both the partners when the profits earned by the firm is Rs. 2,400. (a) Rs. 2,500 and Rs. 1,500. (b) Rs. 1,500 and Rs. 900. (c) No interest will be paid to the partners. (d) None of the above. 8. Seeta and Geeta are partners sharing profits and losses in the ratio 4:1. Meeta was manager who received the salary of Rs. 4,000 p.m. in addition to a commission of 5% on net profits after charging such commission. Profits for the year is Rs. 6,78,000 before charging salary. Find the total remuneration of Meeta. (a) Rs. 78,000 (b) Rs. 88,000. (c) Rs. 87,000 (d) Rs. 76,000. 9. The relationship between persons who have agreed to share the profit of a business carried on by all or any of them acting for all is known as (a) Partnership. (b) Joint Venture. (c) Association of Persons. (d) Body of Individuals. 10. Features of a partnership firm are: (a) Two or more persons carrying common business under an agreement. (b) Sharing profits and losses in the fixed ratio. (c) Business carried by all or any of them acting for all. (d) All of the above. 11. Firm has earned exceptionally high profits from a contract which will not be renewed. In such a case the profit from this contract will not be included in (a) Profit share of the partners. (b) Calculation of the goodwill. (c) Both. (d) None. 12. In the absence of an agreement, partners are entitled to: (a) Salary. (b) Commission. (c) Interest on Loan and Advances. (d) Profit share in capital ratio. 13. Interest on capital will be paid to the partners if provided for in the agreement but only from (a) Profits. (b) Reserves. (c) Accumulated Profits. (d) Goodwill. 14. Partners are suppose to pay interest on drawing only when by the . (a) Provided, Agreement. (b) Permitted, Investors. (c) Agreed, Partners. (d) a & c. 15. When a partner is given Guarantee by the other partners, loss on such guarantee will be borne by: (a) Partnership firm. (b) All the other partners. (c) Partners who gave the guarantee. (d) Partner will highest profit sharing ratio. 16. Guarantee given to a partner A by the other partners B & C means: (a) In case of loss A will not contribute towards that loss. (b) In case of insufficient profits A will receive only the minimum guarantee amount. (c) In case of loss or insufficient profits A will withdraw the minimum guarantee amount. (d) All of the above. 17. What would be the profit sharing ratio if the partnership act is complied with: (a) As per agreement. (b) Equally. (c) In Capital Ratio. (d) None of the above. 18. Would interest on loan be allowed in the absence of any agreement or when partnership deed is silent? (a) No interest allowed. (b) Allowed only agreed by all the other partners. (c) Will be paid only when there are sufficient profits. (d) Allowed at 6% simple interest p.a. 19. When Profit & Loss Appropriation Account is prepared: (a) For Proprietorship firm. (b) For partnership firm. (c) Both (a) and (b) (d) None. 20. What time would be taken into consideration if equal monthly amount is drawn as drawing at the beginning of each month: (a) 7 months. (b) 6 months. (c) 5 months. (d) 6.5 months.
Posted on: Sun, 30 Nov 2014 14:05:10 +0000
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