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

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

In case of death of a partner, the whole amount standing to the credit of his capital account is transferred to …………………. (a) Capital Accounts of all partners (b) Capital Accounts of remaining partners (c) His executor’s account (d) Revenue Account of the Government Answer: (c) His executor’s account

Question 6. A, B and C share profits in the ratio of \(\frac < 1>< 2>\): \(\frac < 3>< 10>\): \(\frac < 1>< 5>\) C dies. The gaining 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. On retirement of a partner, the continuing partner’s capital accounts are debited with retiring partner’s share of goodwill in (a) Old profit sharing ratio (b) Gaining ratio (c) New profit sharing ratio (d) Equal ratio Answer: (b) Gaining ratio

Question 8. N, S, and K have been sharing profit in the ratio of 3:5:7. K retires 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 some unrecorded liability, it will be ………………….. (a) Debited to Revaluation A/c (b) Credited to Revaluation A/c (c) Transferred to Old partners Capital A/Cs (d) Transferred to All Partners Capital A/Cs Answer: (a) Debited to Revaluation A/c

Question 10. The gain of 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 to the partner’s capital at the time of retirement of a partner? (a) General Reserve (b) Profit on revaluation (c) Accumulated losses (d) Accumulated profits Answer: (c) Accumulated losses

Question 12. At the time of retirement, of a partner, workmen compensation reserve after meeting the legal requirement is transferred to (a) Revaluation Account (b) All Partner’s Capital Account (c) Sacrificing Partner’s Capital A/cs (d) Old Partner’s Capital Account Answer: (b) All Partner’s Capital Account

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

Question 14. Undistributed profit and losses – transferred to all the partners at the time of retirement of a partner …………………. (a) should be (A) should not be (c) maybe Answer: (a) should be

Answer: Revaluation A/c

Question 2. What is the gaining ratio? Answer: The gaining ratio is the proportion of the profit which is gained by the continuing partner. Gaining ratio = Ratio of share gained by the continuing partners. Share gained = New share – Old share

Question 8. Sunil, Sumathi and Sundari are partners sharing profits in the ratio of 3:3:4. Sundari retires and her share is taken up entirely by Sunil. Calculate the new profit sharing ratio and gaining ratio. Answer: New Ratio – Old Ratio Sunil = \(\frac < 3>< 10>\) + \(\frac < 4>< 10>\) = \(\frac < 7>< 10>\) (Sundari share is added with old ratio) Sumathi = \(\frac < 3>< 10>\) New Ratio = 7 : 3 Sacrificing Ratio = 1:1

Question 5

John retires on 1st , subject to the following conditions: (i) To appreciate building by 10% (ii) Stock to be depreciated by 5% (iii) To provide ? 1,000 for bad debts (iv) An unrecorded liability of ? 8,000 have been noticed (v) The retiring partner shall be paid immediately Prepare revaluation account, partners’ capital account and the balance sheet of the firm after retirement.

Question 3. Credit balance https://hookupdate.net/craigslist-hookup/ of Profit and Loss Account – appearing in the Balance sheet on the death of a partner is credited to ………………… (a) Deceased Partner’s Capital Account (b) All partner’s capital account (including deceased partner’s capital account (c) Remaining partner’s capital account (d) None of the above Answer: (b) All partner’s capital account (including deceased partner’s capital account)