Admission of a Partner
Commerce ⇒ Accountancy
Admission of a Partner starts at 12 and continues till grade 12.
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Explain the accounting treatment of undistributed profits or reserves at the time of admission of a partner.
Explain the term 'hidden goodwill' in the context of admission of a partner.
Explain the term 'sacrificing ratio' in the context of admission of a partner.
Explain why the old profit sharing ratio is not always the same as the sacrificing ratio at the time of admission of a partner.
A and B are partners sharing profits in the ratio 3:2. They admit C for 1/5th share. C brings ₹40,000 as capital and ₹10,000 as goodwill. How much will A and B receive as goodwill if they sacrifice in the ratio 2:1?
A and B are partners sharing profits in the ratio 3:2. They admit C for 1/5th share. What will be the new profit sharing ratio if C gets his share equally from A and B?
A and B are partners sharing profits in the ratio 5:3. They admit C for 1/4th share. Calculate the new profit sharing ratio if C gets his share from A and B in the ratio 2:1.
A and B are partners sharing profits in the ratio 7:3. They admit C for 1/4th share. Calculate the new profit sharing ratio if C gets his share from A and B in the ratio 3:1.
Which account is credited when a new partner brings premium for goodwill in cash? (1) Goodwill Account, (2) Old Partners’ Capital Accounts, (3) New Partner’s Capital Account, (4) Cash Account
Which of the following is credited when there is a gain on revaluation at the time of admission of a partner? (1) Revaluation Account, (2) Old Partners’ Capital Accounts, (3) New Partner’s Capital Account, (4) Goodwill Account
Which of the following is debited when there is a loss on revaluation at the time of admission of a partner? (1) Old Partners’ Capital Accounts, (2) Revaluation Account, (3) Cash Account, (4) Goodwill Account
Which of the following is NOT a method of valuation of goodwill? (1) Average Profit Method, (2) Capitalization Method, (3) Annuity Method, (4) Super Profit Method
Fill in the blank: The ______ ratio is used to distribute the premium for goodwill among the old partners.
Fill in the blank: The amount of goodwill brought in by the new partner is shared by the old partners in the ______ ratio.
Fill in the blank: The profit or loss on revaluation of assets and liabilities is transferred to the ______ partners’ capital accounts.
The amount brought in by a new partner as his share of capital is credited to ______ Account.
State whether the following statement is True or False: At the time of admission of a partner, revaluation of assets and liabilities is necessary.
True or False: A new partner can be admitted into a partnership firm without the consent of all existing partners.
True or False: Goodwill is always shown in the books after the admission of a new partner.
True or False: The new partner is entitled to a share in the firm’s accumulated profits and reserves at the time of admission.
