MCQ of RETIREMENT OR DEATH OF A PARTNER accountancy class 12

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Q. 1. Retiring partner is compensated for parting with the firm's future profits in

favour of remaining partners. The remaining partners contribute to such compensation amount in:

(B) Capital Ratio

(D) Profit Sharing Ratio

(A) Gaining Ratio

(C) Sacrificing Ratio

(C.S. Foundation Dec., 2012)

Q. 2. Gaining Ratio' means:

(A) Old Ratio - New Ratio

(C) Old Ratio- Sacrificing Ratio

(B) New Ratio-Old Ratio

(D) New Ratio -Sacrificing Ratio

Q. 3. What treatment is made of accumulated profits and losses on the retirement of

a partner?

(A) Credited to all partner's capital accounts in old ratio.

(B) Debited to all partner's capital accounts in old ratio.

(C) Credited to remaining partner's capital accounts in new ratio.

(D) Credited to remaining partner's capital accounts in gaining ratio.

0.4. At the time of retirement of a partner, profit on revaluation will be credited

to

(A) Capital Account of retiring partner

(B) Capital Accounts of all partners in the old profit sharing ratio.

(C) Capital Accounts of the remaining partners in their old profit sharing ratio

(D) Capital Accounts of the remaining partners in their new profit sharing

ratio

Q. 5. What journal entry will be recorded for writing off the goodwill already

existing in Balance Sheet at the time of retirement of a partner?
(A) Retiring Partner's Capital A/c Dr.
To Goodwill A/c

(B) All Partner's Capital A/es (including retiring) Dr. (in old ratio)

To Goodwill A/c

(C) Remaining Partner's Capital A/cs Dr. (in gaining ratio)

To Goodwill A/c

(D) Remaining Partner's Capital A/es Dr. (in new ratio)

To Goodwill A/c

Q. 6. What journal entry will be recorded for deceased partner's share in profit from

the closure of last balance sheet till the date of his death?

(A) Profit and Loss Ac DR

To Deceased Partner's Capital A/c

(B) Deceased Partner's Capital A/C DR

To Profit and Loss A/c

(C)Deceased Partner's Capital A/c DR

To Profit and Loss Suspense A/c

(D) Profit and Loss Suspense A/c DR

To Deceased Partner's Capital A/c

Q.7. On retirement of a partner, goodwill will be credited to the Capital Account

of:
(A) Retiring Partner

(C) All Partners

(B) Remaining Partners

(D) None of the Above

Q.8. On the death of a partner, the amount due to him will be credited to

(A) All partner's Capital Accounts

(B) Remaining partner's Capital Accounts

(C) His Executor's Account
(D) Governments' Revenue Account

Q.9. How goodwill is recorded on the retirement of a partner?

(A) Remaining Partner's Capital A/cs Dr. (In Gaining Ratio)

To Retiring Partner's Capital A/c (with his share of goodwill)

(B)Remaining Partner's Capital A/cs Dr. (In New Ratio)

To Retiring Partner's Capital A/c (with his share of goodwill)

(C) Goodwill A/c Dr

To All Partner's Capital A/cs (In

Old Ratio)

(D) Goodwill A/c DR
To Retiring Partner's Capital A/c (with his share)

Q. 10. A, B and C are partner in 3:4:2. B wants to retire from the firm. The profit

on revaluation on that date was36,000. New ratio of A and C is 5:3. Profit on revaluation will be distributed as:

(A) A 16,000, В12,000; С 8,000

(B) A 12,000,B 16,000, C 28,000

(C) A 22,500; C 13,500

(D) A 23,625; C 12,375

Q. 11. A, B and C are partners sharing profits in the ratio of 5:2:1. If the new ratio

on the retirement of A is 3: 2, what will be the gaining ratio
(A)11:14
(B) 3:2
(C) 2:3
(D)14:13

Q. 12. P. Q and R are partners sharing profits in the ratio of 5:4:3.Q retires and
and R decide to share future profits equally. Gaining Ratio will be

(A)5:3
(B)1:1
(C)1:3
(D)3:1

Q. 13. A, B and C are partners sharing profits in the ratio of 1/2: 1/4: 1/4. New ratio
on the retirement of B will be:

(A)2:4
(B)1:2
(C)2:1

(D)1/4:1/2

Q. 14. A, B and C are partners sharing profits in the ratio of 1/4: 3/10:9/20. The
New ratio on the retirement of C will be

(A)6:5
(B)5:6
(C)4:3
(D) 4: 10

Q. 15. X, Y and Z have been sharing profits in the ratio of 4:2 1 Z retires. X and Y
take Z's share equally. New profit sharing ratio will be:
(A) 5:2
(B) 5:3

(C)9:5

(D)4:2

Q. 16. P, O and R have been sharing profits and losses in the ratio of 5: 3:2.Q
retires. His share is taken by P and R in the ratio of 2: 1. New profit sharing
ratio will be:
(A) 6:4

(B)7:3
(C) 7:2
(D) 6:3

Q. 17. A, B and C share profits and losses of the firm equally. B retires from business and his share is purchased by A and C in the ratio of 2:3. New profit sharing ratio between A and C respectively would be
(A) 01:01
(C) 07:08
(B) 02 : 02
(D) 03:05

(C.S. Foundation, Dec. 2018)

Q. 18. P, Q and R have been sharing profits in the ratio of 8:5:3. P retires. Q takes
3/16th share from P and R takes 5/16th share from P. New profit sharing ratio
will be:

(A)1:1
(B) 10:6

(C)9:7

(D)5:3

Q. 19. A, B and C are equal partners. C retires. He surrenders 3/5th of his share in
favour of A and 2/5th in favour of B. New ratio will be
(A) 3:2
(C) 7:8
(B) 8:7
(D) 2:3

Q. 20. P, Q and R are partners sharing profits in the ratio of 4:3:2.0 retires and his
share was taken up by P and R in the ratio 3 : 2. New profit sharing ratio will
be
(A) 16:29
(B) 29:16

(C)3:2

(D)2:3

21. L, P and G are three partners sharing profits in the ratio 15:9:8. G retires. L
and P decided to share profits in equal ratio. Gaining ratio will be
(A) 15:9
(B) 9:15

(C)7:1

(D)1:7

Q 22. On 1st April, 2019 A, B and C were partners sharing profits and losses in the
ratio of 5:3: 2 respectively. On this date B retires. The new profit sharing ratio of A and C will be 3:2. Gaining ratio will be

(A) 1:2

(B)2:1

(C)1:1
(D) 5:2

Q 23. B, P and L sharing profits in the ratio 4:3:2. B retires, P and L decided to
share profits in future in the ratio of 5:3. Gaining ratio will be:
(A) 11:21
(B) 21:11

(C)11:13

(D)13:11

Q. 24. P, O and R were partners sharing profits in the ratio 2:2:1. retires and the
new profit sharing ratio of P and R will be 3:1. Gaining ratio will be

(A)1:7
(B) 2:1

(C)1:2
(D) 7:1

Q. 25. A, B and C are equal partners in a firm. B retires and the remaining partners
decide to share the profits of the new firm in the ratio of 5 :4. Gaining ratio
will be:

(A)1:1

(B)1:2

(C)2:1

(D) 5:4

Q.26. A, B and C are partners sharing profit or loss in the ratio of 3 :2:1. B retires
and after B's retirement A and C agreed to share profit or loss in the ratio of
3:2 in future. Their gaining ratio will be
(A) 3:1

(B)1:3

(C) 3:7

(D) NONE OF THE ABOVE

Q. 27. A, B and Care partners sharing profit or loss in the ratio of 4 : 3 : 2, C retires
and after C's retirement A and B agreed to share profit or loss in the ratio of
4:3 in future. Their gaining ratio will be
(A) 3:2
(C) 3:4
(B) 4:3

(D)1:1

Q. 28. A, B and C are partners sharing profit or loss in the ratio of 2:3:4. A retires
and after A's retirement B and C agreed to share profit or loss in the ratio of
3:4 in future. Their gaining ratio will be:
(A) 2:3
(C) 3:4
(B) 4:3
(D)1:1

Q.29, A, B and C were partners in a firm sharing profits and losses in the ratio of
2 2:1.The capital balance are 50,000 for A, 70,000 for B, 35,000 for C
B decided to retire from the firm and balance in reserve on the date was
25,000. If goodwill of the firm was valued at 230,000 and profit

revaluation was 7,500 then, what amount will be payable to B
(A) 70,820
(C) 75,000
(B) 76,000
(D) 95,000

Q. 30. P. Q and R are sharing profits and losses equally. R retires and the goodwill
appearing in the books at 30,000. Goodwill of the firm is valued
1,50,000. Calculate the net amount to be credited to R's Capital A/c.
(A) 60,000
(C) 240,000
(B) 50,000
(D) 10,000

Q. 31. Ram, Krishna and Ganesh were sharing profits and losses in the ratio
5 3:2. Ram retires and Krishna and Ganesh share the future profits
losses equally. Goodwill of the firm is valued at 1,00,000. Calculate
amount of goodwill to be debited to Krishna's and Ganesha's Capital A/c
(A) 60,000 & 40,000
(C) 40,000 & 60,000
(B)20,000 &30,000
(D) 30,000 & 20,000

Q. 32. A, B and Care partners with profit sharing ratio 4 : 3 : 2.B retires and goodwill
was valued 1,08,000. If A & C share profits in 5 3, find out the goodwill
shared by A and C in favour of B
(A) 22,500 and 13,500
(C) 67,500 and 40,500
(B) 16,500 and 19,500
(D) 19,500 and 16,500

Q. 33, A, B and C are sharing profits in the ratio of 3:2:1. B retires and on the day
of B's retirement Goodwill is valued at 360,000. A and C decided to share
future profits in the ratio of 3.2. Journal entry will be
(A) A's Capital A/c Dr. 18,000
C's Capital A/c Dr. 42,000
To B's Capital A/c 60,000

(B) A's Capital A/c Dr 6,000
     C's Capital A/c Dr. 14,000
      To B's Capital A/c 20,000

(C) A's Capital A/c Dr. 36,000

C's Capital A/c Dr. 24,000
To B's Capital A/c 60,000

(D)   A's Capital A/c DR 12,000
       C"s Capital A/c DR 8,000
         To B's Capital A/c 20,000

Q. 34. P, O and R share profits in the ratio of 5: 4:3. R retires and the new ratio is 5:3 if r is given 6,000 as goodwill, journal entry will be:

(A) P's Capital A/c 1,000
Q's Capital A/c Dr. 5,000
To R's Capital A/c 6,000

(B) P's Capital A/c 5,000
Q's Capital A/c 1000
To R's Capital A/c 6,000

(C) P's Capital A/c 3,750
Q's Capital A/c 2,250
To R's Capital A/c 6,000

(D) P's Capital A/c 3333
Q's Capital A/c 2667
To R's Capital A/c 6,000

Q. 35. X, Y and Z were partners in a firm sharing profits in the ratio of 3:2:1.x
retired and the new profit sharing ratio between Y and Z will be 5:4. On X s
retirement the goodwill of the firm was valued at 54,000. Journal entry will
be
(A) Ys Capital A/c Dr.24,000
Z's Capital A/c Dr. 30,000
To X's Capital A/c 54000

(B) Y's Capital A/c 15,000
Z's Capital A/c 12,000
To X's Capital A/c 27,000

(C) Y's Capital A/c Dr. 12,000

Z's Capital A/c 15,000

To X's Capital A/c 27,000

(D) X's Capital A/c Dr. 27,000
To Y's Capital A/c 12,000
To Z's Capital A/c 15,000


Q. 36. A, B and C are partners sharing profits in the ratio of 3:4:5. B retires and the
goodwill of the firm is valued at 42,000. A and C decide to share profits in
the ratio of 3 :4. Journal entry will be
(A) A's Capital A/c 6,000
C's Capital A/c 8,000
To B's Capital A/c 14,000

(B) A's Capital A/c 7,500
C's Capital A/c 6,500
To B's Capital A/c 14,000

(C) A's Capital A/c 22,500
C's Capital A/c Dr. 19,500
To B's Capital A/c 42,000

(D) B's Capital A/c Dr. 14,000
To A's Capital A/c 7,500
To C's Capital A/c 6,500

Q.37. P, Q and R were partners sharing profits in the ratio 5:3:2 respectively. p
retires from the firm and Q and R decide to share future profits equally
Goodwill is valued at 50,000.
Adjustment entry for goodwill will be
(A) Q's Capital A/c 15,000
R's Capital A/c 10,000
To P's Capital A/c 25,000

(B) q's Capital A/c 20,000
R's Capital A/c Dr. 30,000
To P's Capital A/c 50,000

(C) Q's Capital A/c 12,500
R's Capital Ac 12,500
To P's Capital A/c 25,000

(D) O's Capital A/c 10,000
R's Capital A/c 15,000
To P's Capital A/c 25,000


Q. 38. X Y and Z are partners sharing profits in the ratio of 2:3:5 goodwill is already appearing in their books at a value of 60,000. X retires and Y and Z decided to share future profits equally. Journal entry will be
(A) Ys Capital A/c Dr. 12,000
To X's Capital A/c 12,000

(B) Y's Capital A/c dr 60,000
To X's Capital A/c 60,000

(C) X's Capital A/c 2,400
Y's Capital A/c 3,600
Z's Capital A/c 6,000
To Goodwill A/c 12,000

(D) X's Capital A/c 12,000
Y's Capital A/c Dr. 18,000
Z's Capital A/c 30,000
To Goodwill A/c 60,000


Q. 39. A, B and C are partners in a firm sharing profit/loss in the ratio of 2:2: 1.On
March 31, 2019, C died. Accounts are closed on Dec., 31 every year. The
sales for the year 2018 was 6,00,000 and the profits were 60,000. The sales
for the period from Jan. 1, 2019 to March 31, 2019 were 2,00,000. The share
of deceased partner in the current year's profits on the basis of sales is
(A) 20,000
(C) 23,000
(B) 8,000
(D) 74,000

Q40. A and B and C were partners sharing profits and losses in the ratio of 2:2:1
Books are closed on 31st March every year. C dies on 5th November, 2018.
Under the partnership deed, the exe cutors of the deceased partner are entitled

to his share of profit to the date of death, calculated on the basis of last year's
profit. Profit for the year ended 3 1 st March, 2018 was 2,40,000. C's share of
profit will be
(A) 28,000
(B) 32,000
(D) 48,000
(C) 728,800
HOTS

0. 41. P O and R were partners sharing profits in the ratio of their Capital
contribution which were 6,00,000; 74,00,000 and 5,00,000 respectively.
Their books are closed on 31st March every year. P dies on 24th August,
2018. Under the partnership deed, deceased partner is entitled to his share of
profit/loss to the date of death based on the average profits of preceding three
years. Profits were 2015 50,000; 2016 1,20,000 (Loss); 2017 30,000 and
2018 60,000. P's share of profit/loss will b
(A)3.200
(B) 26,400
(D) 4,800
(C) 12,000