MCQ of change in profit sharing ratio accountancy class 12

Q. 1. Sacrificing Ratio

(A) New Ratio - Old Ratio

(C) Old Ratio - Gaining Ratio

(B) Old Ratio-New Ratio

(D) Gaining Ratio -Old Ratio

Q. 2. Gaining Ratio

(A) New Ratio - Sacrificing Ratio

(C) New Ratio- Old Ratio

(B) Old Ratio - Sacrificing Ratio

(D) Old Ratio - New Ratio

Q. 3. A and B were partners in a firm sharing profit or loss euqally. With effect from

1st April, 2019 they agreed to share profits in the ratio of 4:3. Due to change

in profit sharing ratio, A's gain or sacrifice will be

(A) Gain 1/14

(B) Sacrifice1/14

(C) Gain4/7

(D) Sacrifice3/7

Q. 4. A and B were partners in a firm sharing profit or loss equally. With effect from

1st April, 2019 they agreed to share profits in the ratio of 4 :3. Due to change

in profit sharing ratio, B's gain or sacrifice will be:

(A) Gain 1/14

(B) Sacrifice1/14

(C) Gain 4/7

(D) Sacrifice 3/7

O. 5. A and B were partners in a firm sharing profit or loss in the ratio of 3 : 5. With

effect from 1st April, 2019, they agreed to share profits or losses equally. Due

to change in profit sharing ratio, A's gain or sacrifice will be:

(A) Gain 3/8

(B) Gain 1/8

(C) Sacrifice3/8

(D) Sacrifice1/8

0.6. A and B were partners in a firm sharing profits and losses in the ratio of 2:1

With effect from 1st January, 2019 they agreed to share profits and losses

equally. Individual partner's gain or sacrifice due to change in the ratio will

be

(A) Gain by A1/6: Sacrifice by B1/6

(B) Sacrifie by A1/6

Gain by B1/6

(C) Gain by A 1/2; Sacrifice by B1/2

(D) Sacrifice by A 1/2; Gain by B 1/2

Q.7. A and B share profits and losses in the ratio of 3: 2. With effect from 1st

January, 2019, they agreed to share profits equally. Sacrificing ratio and

Gaining Ratio will be:

(A) Sacrifice by A 1/10: Sacrifice by B1/10

(B) Gain by a  1/10 Gain by B 1/10

(C) Sacrifice by a 1/10: Gain by B 1/10

(D) Gain by A1/10

Sacrifice by B 1/10

Q. 8. A and B were partners in a firm sharing profit or loss in the ratio of 3: 1. With

effect from Jan. 1, 2019 they agreed to share profit or loss in the ratio of 2:1

Due to change in profit-loss sharing ratio, B's gain or sacrifice will be

(A) Gain 1/12

(B) Sacrifice  1/12

(C) Gain 1/3

(D) Sacrifice 1/3

Q. 9. A, B and C were partners sharing profit or loss in the ratio of 7:3:2. From

Jan. 1, 2019 they decided to share profit or loss in the ratio of 8:4:3. Due to

change in the profit-loss sharing ratio, B's gain or sacrifice will be :

(A) Gain 1/60

(B) Sacrifice 1/60

(C) Gain 2/ 60

(D) Sacrifice 3/60

Q.10. X, Y and Z are partners in a firm sharing profits and losses in the ratio of

5:3:2. The partners decide to share future profits and losses in the ratio of

3:2:1. Each partner's gain or sacrifice due to change in the ratio will be:

(A) X Sacrifice 1/30: Y Gain 1/30 z Nil

(B) X Gain 1/30 Y Nil, Z Sacrifice 1/30

(C) XNİI; Y Sacrifice 1/30; Z Gain 1/30

(D) X Nil; Y Gain 1/30. Z Sacrifice 1/30

Q. 11. A, B and C were partners in a firm sharing profits and losses in the ratio of

3:2:1. The partners decide to share future profits and losses in the ratio of

2:2:1. Each partner's gain or sacrifice due to change in ratio will be

(A) Sacrifice A 3/30: Gain B 2/30, Gain C1/30

(B) Gain A2/30;Gain B1;/30Sacrifice C1/30

(C) Sacrifice A3/30 Gain B1/30, Gain C2/30

(D) Gain A1/30 Gain B 1/15 Sacrifice C 1/10

Q. 12. A, B and C were partners in a firm sharing profits and losses in the ratio of

4:3:2. The partners decide to share future profits and losses in the ratio of

2:2:1. Each partner's gain or sacrifice due to change in the ratio will be

(A) Sacrifice A2/45

Sacrifice B1/45Gain C3/45

(B) Gain A2/45

; Sacrifice b3/45;Gain C1/45

(C) sacrifice A2/45;gain B 3/45;sacrifice C 1/45

(D) Gain A 2/45; Gain B1/45

, Sacrifice C3/45

Q. 13. A, B and C were partners in a firm sharing profits in 4 3 2 ratio. They

decided to share future profits in 4:3: 1 ratio. Sacrificing ratio and gaining

ratio will be:

(A) A Sacrifice 4/72;BSacrifice3/72;C Gain 7/72

(B) A Gain3/72;BGain4/72;C Sacrifice7/72

(C) A Sacrifice 3/72;B sacrifice 4/72; C Gain 7/72

(D) A Gain 72 B Gain 72: C Sacrifice 7

O. 14. X, Y and Z were partners sharing profits in the ratio 2 : 3 : 4 with effect from

l st January, 2019 they agreed to share profits in the ratio 3 : 4 5. Each

partner's gain or sacrifice due to change in the ratio willl be:

(A) x gain 1/36;y nil;Z sacrifice 1/36

(B) x sacrifice1/36; Y nil;Z gain 1/36

(C) x gain1/36; Y sacrifice 1/36;Z nil

(D) x sacrifice1/36; Y gain 1/36;Z nil

Q. 15. X, Y and Z were in partnership sharing profits in the ratio 4:3:1. The partners

agreed to share future profits in the ratio 5: 4:3. Each partner's gain or

sacrifice due to change in ratio will be

(A) X Sacrifice 2/24Y Sacrifice1/24 ;ZGain3/24

(B) XGain 2/24

; YGain 1/24; Z Sacrifice 3/24

(C) XSacrifice 1/24Sacrifice 2/24

Z Gain 3/24

(D) X Sacrifice 2/24 Y Gain 3/24 Z Sacrifice 1/24

Q. 16. A, B and C are equal partners in the firm. It is now agreed that they will share

the future profits in the ratio 5:3 :2. Sacrificing ratio and gaining ratio of

different partners will be:

(A) A Sacrifice 5/30Gain 1/30 C Gain 4/30

(B) A Gain 5/30, B Sacrifice 4/30:C Sacrifice 1/30

(C) A Gain5/30; B Sacrifice 1/30;C Sacrifice4/30

(D) A Sacrifice5/30 B Gain4/30

C Gain1/30

Q. 17. (A) Goodwill is a fictitious asset

(B) Goodwill is a current asset

(C) Goodwill is a wasting asset

(D) Goodwill is a intangible asset

Q. 18. The excess amount which the firm can get on selling its assets over and above

the saleable value of its assets is called

(A) Surplus

(C) Reserve

(B) Super profits

(D) Goodwill

HOTS

Q. 19. Which of the following is NOT true in relation to goodwill?

(A) It is an intangible asset

(C) It has a realisable value

(B) It is fictitious asset

(D) None of the above

0. 20. When Goodwill is not purchased goodwill account can

(A) Never be raised in the books

(B) Be raised in the books

(C) Be partially raised in the books

(D) Be raised as per the agreement of the partners

Q. 21. The Goodwill of the firm is NOT affected by:

(A) Location of the firm

(B) Reputation of firm

(C) Better customer service

(D) None of the above

Q.22. Capital employed by a partnership firm is 5,00,000. Its averag

60,000. The normal rate of return in similar type of business is 10%. What is

the amount of super rofits?

(A) 50,000

(C) 6,000

(B) 10,000

(D) 56,000

Q. 23. Weighted average method of calculating goodwill is used when:

(A) Profits are not equal

(C) Profits are fluctuating

(B) Profits show a trend

(D) None of the above

Q. 24. The profits earned by a business over the last 5 years are as follows

12,000; 13,000; 14,000; 18,000 and 2,000 (loss). Based on 2 years

purchase of the last 5 years profits, value of Goodwill will be

(A) 23,600

(C) 1,10,000

(B) 22,000

(D) 1,18,000

Q 25 The average profit of a business over the last five years amounted to 60,000.

The normal commercial yield on capital invested in such a business is deemed

to be 10%p.a. The net capital invested in the business is 5,00,000. Amount

of goodwill, if it is based on 3 years purchase of last 5 years super profits will

be

(A) 21,00,000

(C) 30,000

(B) 1,80,000

(D) 21,50,000

HOTS

Q. 26. Under the capitalisation method, the formula for calculating the goodwill is

(A) Super profits multiplied by the rate of return

(B) Average profits multiplied by the rate of return

(C) Super profits divided by the rate of return

(D) Average profits divided by the rate of return

Q 27net assets of a firm including fictitious assets of 5,000 are 85,000. The

net liabilities of the firm are 30,000. The normal rate of return is 10% and the

average profits of the firm are 8,000. Calculate the goodwill as per

capitalisation of super profits.

(A) 20,000

(C) 25,000

(B) 30,000

(D) None of these

Q. 28. Total Capital employed in the firm is 8,00,000, reasonable rate of return is

15% and Profit for the year is? 12,00,000. The value of goodwill of the firm

as per capitalization method would be

(A) 82,00,000

(C) 72,00,000

(B) 12,00,000

(D) 42,00,000

(C.S. Foundation, June 2013)

Q. 29. The average capital employed of a firm is 74,00,000 and the normal rate of

return is 15%. The average profit of the firm is?80,000 per annum. If the

remuneration of the partners is estimated to be 10,000 per annum, then on

the basis of two years purchase of super-profit, the value of the Goodwill will

be

(A)? 10,000

(C) 60,000

(B) 20,000

(D) 280,000

Q. 30. A firm earns? 1,10,000. The normal rate of return is 10%. The assets of the firm amounted to 11,00,000 and liabilities to 1,00,000. Value of goodwill by capitalisation of Average Actual Profits will be:

(A) 22,00,000

(C) 5,000

(B) 10,000

(D) 1,00,000

(C.S. Foundation Dec., 2012)

Q. 31. Capital invested in a firm. is 5,00,000. Normal rate ofreturn is 10%. Average

profits of the firm are 764,000 (after an abnormal loss of 24,000). Value of goodwill at four times the super profits will be

(A) 72,000

(C) 240,000

(B)  40,000

(D) 80,000

Q. 32. P and Q were partners sharing profits and losses in the ratio of 3: 2. The

decided that with effect from 1st January, 2019 they would share profits and

losses in the ratio of 5 : 3. Goodwill is valued at 1,28,000. In adjustment y entry

(A) Cr. P by 3,200; Dr. Q by 3,200

(B) Cr. P by 237,000; Dr. Q by *37,000

(C) Dr. P by 37,000; Cr. Q by 37,000

(D) Dr. P by3,200 Cr. by 3,200

Q. 33.A, B and C are partners sharing profits in the ratio of 4:3:2 decided to share

profits equally. Goodwill of the firm is valued at R10,800. In adjusting entry

for goodwill

(A) A's Capital A/c Cr. by 24,800; B's Capital A/c Cr. by3,600;

C's Capital A/c Cr.by 2,400

(B) A's Capital A/c Cr. by 3,600; B's Capital A/c Cr. by 3,600;

C's Capital A/c Cr. by 3,600.

(C) A's Capital A/c Dr. by? 1,200; C's Capital A/c Cr. by 1,200;

(D) A's Capital A/c Cr. by? 1,200; C's Capital A/c Dr. by 1,200

Q. 34. A, B and C were partners sharing profits and losses in the ratio of 7. 3

From Ist January, 2019 they decided to share profits and losses in the ratio

8:4:3. Goodwill is 1,20,000. In Adjustment entry for goodwill

(A) Cr. A by 6,000; Dr. B by 22,000; Dr. C by 4,000

(B) Dr. A by 6,000; Cr. B by 22,000; Cr. C by 4000

(C) Cr. A by 6,000; Dr. B by ?4,000; Dr. C by 2,000

(D) Dr. A by 6,000; Cr. B by 4,000; Cr. C by 2,000

Q. 35. P, Q and R were partners in a firm sharing profis in 5 3 2 rat

decided to share the future profits in 2:3:5. For this purpose the goodwill o

the firm was valued at 1,20,000. In adjustment entry for the treatment

goodwill due to change in the profit sharing ratio

(A) Cr. P by ?24,000; Dr. R by 24,000

(B) Cr. P by 60,000; Dr. R by R60,000

(C) Cr. P by ?36,000; Dr. R by 36,000

(D) Dr. P by 36,000; Cr. R by 36,000

Q. 36. A, B and C are partners in a firm sharing profits in the ratio of 3:4:1. They

decided to share profits equally w.e.f. 1st April, 2019. On that date the Profit

and Loss Account showed the credit balance of 96,000. Instead of closing

the Profit and Loss Account, it was decided to record an adjustment entry

reflecting the change in profit sharing ratio. In the journal entry

(A) Dr. A by 4,000; Dr. B by 16,000; Cr. C by 20,000

(B) Cr. A by 4,000; Cr. B by 16,000; Dr. C by 20,000

(C) Cr_Aby? 16,000; Cr. B by? 4,000; Dr. C by 20,000

(D) Dr. A by 16,000; Dr. B by R 4,000; Cr. C by 20,000

Q. 37. A, B and C are partner sharing profits in the ratio of 1 :2:3. On 1-4-2019 the

decided to share the profits equally. On the date there was a credit balance o

1,20,000 in their Profit and Loss Account and a balance of 1,80,000 in

General Reserve Account. Instead of closing the General Reserve Account

and Profit and Loss Account, it is decided to record an adjustment entry for

the same. In the necessary adjustment entry to give effect to the above

arrangement:

(A) Dr. A by 50,000; Cr. B by 50,000

(B) Cr. A by 50,000; Dr. B by R50,000

(C) Dr. A by 50,000; Cr. C by 50,000

(D) Cr. A by ?50,000; Dr. C by 50,000

HOTS

Q. 38. X Y and Z are partners in a firm sharing profits in the ratio 4 : 3 2. Their Balance Sheet as at 31-3-2019 showed a debit balance

1,80,000. From 1-4-2019 they will share profits equally. In the necessary

journal entry to give effect to the above arrangement when X, Yand Z decided

not to close the Profit & Loss Acccount

e of Profit & Loss Account

(A) Dr. Xby 20,000; Cr. Z by 20,000

(B) Cr. X by 20,000; Dr. Zby 20,000

(C) Dr. X by 40,000; Cr. Z by 40,000

(D) Cr. X by 40,000; Dr. Z by 40,000

HOTS

Q. 39. Arun and Varun are partners sharing profits in the ratio of 4:3. Their Balance

Sheet showed a balance of 56,000 in the General Reserve Account and a

debit balance of 14,000 in Profit and Loss Account. They now decided to

share the future profits equally. Instead of closing the General Reserve

Account and Profit and Loss Account, it is decided to pass an adjustment entry

for the same. In adjustment entry

(A) Dr. Arun by 3,000; Cr. Varun by 3,000

(B) Dr. Arun by 5,000; Cr. Varun by 5,000

(C) Cr. Arun by 5,000; Dr. Varun by 5,000

(D) Cr. Arun by 3,000; Dr. Varun by 3,000

HOTS

40. X, Y and Z are partners in a firm sharing profits in the ratio of 3:2: 1. They

decided to share future profits equally. The Profit and Loss Account showed

a Credit balance of 60,000 and a General Reserve of 230,000. If these are

not to be shown in balance sheet, in the journal entry

(A) Cr. Xby 15,000; Dr. Z by 15,000

(B) Dr. X by 15,000; Cr. Z by 15,000

(C) Cr. X by 45,000; Cr. Yby 30,000; Cr. Z by 15,000

(D) Cr. Xby 30,000; Cr. Y by 30,000; Cr. Z by 30,000

Q. 41. X, Y and Z are partners sharing profits and losses in the ratio 5:3:2. They

decide to share the future profits in the ratio 3:2: 1. Workmen compensation

reserve appearing in the balance sheet on the date if no information is

available for the same will be

(A) Distributed to the partners in old profit sharing ratio

(B) Distributed to the partners in new profit sharing ratio

(C) Distributed to the partners in capital ratio

(D) Carried forward to new balance sheet without any adjustment

0. 42. Any change in the relationship of existing partners which results in an end of

the existing agreement and enforces making of a new agreement is called

(A) Revaluation of partnership.

(B) Reconstitution of partnership.

(C) Realization of partnership

(D) None of the above.

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