MCQ Questions for Class 12 Accountancy Chapter 4 Reconstitution of Partnership Firm: Retirement / Death of a Partner with Answers

Check the below NCERT MCQ Questions for Class 12 Accountancy Chapter 4 Reconstitution of Partnership Firm: Retirement / Death of a Partner with Answers Pdf free download. MCQ Questions for Class 12 Accountancy with Answers were prepared based on the latest exam pattern. We have provided Reconstitution of Partnership Firm: Retirement / Death of a Partner Class 12 Accountancy MCQs Questions with Answers to help students understand the concept very well.

Reconstitution of Partnership Firm: Retirement / Death of a Partner Class 12 MCQs Questions with Answers

MCQ On Retirement And Death Of A Partner Class 12  Question 1.
On retirement of a partner’s the amount of General Reserve is transferred to all partner’s capital account in:
(a) New Profit Sharing Ratio
(b) Capital Ratio
(c) Old Profit Sharing Ratio
(d) None of these

Answer

Answer: (c) Old Profit Sharing Ratio


MCQ Questions For Class 12 Accountancy Chapter 4 Question 2.
X, Y and Z were partners sharing profits in the ratio of 5 : 3 : 2. Goodwill does not appear in the books but it is agreed to be worth 1,00,000 Rs.. X retires from the firm and Y and Z decide to share profits equally. X’s share of goodwill will be debited to Y’s and Z’s Capital A/cs in………ratio:
(a) \(\frac{1}{2}: \frac{1}{2}\)
(b) 2 : 3
(c) 3 : 2
(d) None of these

Answer

Answer: (b) 2 : 3


Retirement And Death Of A Partner MCQ Class 12 Question 3.
x,y are z are partners and share profits in the ratio of 5 : 3 : 2. y retires and x takes 1/10 from y and z takes 1/5 from y. The new profit sharing ratio will be :
(a) 7 : 13
(b) 13 : 7
(c) 3 : 2
(d) 1 : 1

Answer

Answer: (c) 3 : 2


MCQ On Retirement Of Partner Class 12 Question 4.
The old profit-sharing ratio among Rajender, Satish and Tejpal were 2 : 2 : 1. The new profit-sharing ratio after Satish’s retirement is 3 : 2. The gaining ratio is :
(a) 3 : 2
(b) 2 : 1
(c) 1 : 1
(d) 2 : 3

Answer

Answer: (c) 1 : 1


Retiring Or Outgoing Partner MCQ Class 12 Question 5.
The amount due to the deceased partner is paid to his……….
(a) Father
(b) Friend
(c) Wife
(d) Executors

Answer

Answer: (d) Executors


Retirement Or Death Of A Partner MCQ Class 12 Question 6.
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) Account of the Government

Answer

Answer: (c) His Executor’s Account


Retirement Of Partner MCQ Class 12 Question 7.
On the death of a partner in a firm payments are made to;
(a) Capital A/c
(b) Executor’s A/c
(c) Current A/c
(d) Loan A/c

Answer

Answer: (b) Executor’s A/c


MCQ On Death Of A Partner Class 12 Question 8.
X, Y and Z share profits in the ratio of \(\frac{1}{2}: \frac{1}{3}: \frac{1}{6}, \mathbf{Z}\) dies. New ratio of X and Y will be :
(a) 3 : 2.
(b) 2 : 3
(c) 2 : 1
(d) None of these

Answer

Answer: (a) 3 : 2.


Retirement Of A Partner MCQ Class 12 Question 9.
The executors of deceased partner will be paid interest on the amount due from the date of death of the partner at:
(a) 5% p.a.
(b) 6% p.a.
(c) 7% p.a.
(d) 8% p.a.

Answer

Answer: (b) 6% p.a.


MCQ Of Retirement Of A Partner Class 12 Question 10.
In the event of death of a partner, the accumulated profits and losses are shared by the partners in their:
(a) Old Profit-sharing Ratio
(b) New Profit-sharing Ratio
(c) Capital Ratio
(d) None of these

Answer

Answer: (a) Old Profit-sharing Ratio


Question 11.
On the death of a partner, the amount of Joint Life Insurance Policy is credited to the Capital Accounts of:
(a) Only the deceased partner
(b) All partners including the deceased partner
(c) Remaining partners, in the new profit-sharing ratio
(d) Remaining partners, in their old profit-sharing ratio

Answer

Answer: (b) All partners including the deceased partner


Question 12.
On death of a partner, the remaining partner(s) who have gained due to change in profit-sharing ratio should compensate the:
(a) Deceased partner
(b) Remaining partners (who have sacrificed) as well as decreased partner
(c) Remaining partners (who have sacrificed)
(d) None of these

Answer

Answer: (a) Deceased partner


Question 13.
B, C and D are partners sharing profit in the ratio 7:5:4. D died on 30th June, 2016 and profits for the year 2015-16 were ₹ 12,000. How much share in profits for the period 1st April, 2016 to 30th June, 2016 will be credited to D’s Account:
(a) ₹ 3,000
(b) ₹ 750
(c) Nil
(d) ₹ 1,000

Answer

Answer: (b) ₹ 750


Question 14.
A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1. C died on 31st March, 2016. The profits of the financial year ending 31st March, 2016 is ₹ 64,000. The share of the deceased partner in the profits will be:
(a) ₹ 9,200
(b) ₹ 12,800
(c) ₹ 3,100
(d) ₹ 6,100

Answer

Answer: (b) ₹ 12,800


Question 15.
JLP of the partners is a/an…………..account
(a) Nominal
(b) Personal
(c) Liability
(d) Asset

Answer

Answer: (d) Asset


Question 16.
Joint Life Policy amount received by a firm is distributed in:
(a) Opening Capital Ratio
(b) Closing Capital Ratio
(c) Old Profit-sharing Ratio of Partners
(d) New Profit-sharing Ratio

Answer

Answer: (c) Old Profit-sharing Ratio of Partners


Question 17.
A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. They had a Joint Life Policy of ₹ 3,00,000. Surrender value of JLP in Balance Sheet is ₹ 90,000. C dies what is share of each partner in JLP ?
(a) ₹ 1,05,000 ; ₹ 70,000; ₹ 35,000
(b) ₹ 45,000 ; ₹ 30,000; ₹ 15,000
(c) ₹ 1,50,000 ; ₹ 1,00,000 ; ₹ 50,000
(d) ₹ 1,95,000 ; ₹ 1,30,000 ; ₹ 65,000

Answer

Answer: (c) ₹ 1,50,000 ; ₹ 1,00,000 ; ₹ 50,000


Question 18.
X, Y and Z are partners sharing profits in the ratio of 7 : 5 :4. On 30th June, 2015 Z died and profits for the year ending 31st March, 2016 were ₹ 2,40,000. How much share in profits for the period 1st April to 30th June, 2015 will be credited to Z’s account assuming the profit occurred evenly throughout the year ;
(a) ₹ 60,000
(b) ₹ 15,000
(c) ₹ 20,000
(d) Nil

Answer

Answer: (b) ₹ 15,000


Question 19.
Revaluation Account is prepared at the time of …………
(a) Admission of a partner
(b) Retirement of a partner
(c) Death of a partner
(d) All of the above

Answer

Answer: (d) All of the above


Question 20.
As per section 37 to the Indian Partnership Act, 1932, the executors would be entitled at their choice to interest calculated from the date of death till the date of payment on the final amount due to the deceased partner at………..percent per annum.
(a) 7
(b) 4
(c) 6
(d) 8

Answer

Answer: (c) 6


Question 21.
X, Y and Z are the partners sharing profits in the ratio 2 : 1 : 1. Firm has a joint life policy of ₹ 1,20,000 and in the balance sheet it is appeaming at the surrender value, i.e., ₹ 20,000. On the death of X how this JLP will be distributed among partners:
(a) 50,000 : 25,000 : 25,000
(b) 60,000 : 30,000 : 30,000
(c) 40,000 : 35,000 : 25,000
(d) whole ₹ 1,20,000 to A

Answer

Answer: (b) 60,000 : 30,000 : 30,000


Question 22.
On death of a partner, the firm gets for joint life policy taken for all partners.
(a) Policy amount
(b) Surrender value
(c) Policy amount of deceased partner
(d) Surrender value of all partners

Answer

Answer: (a) Policy amount


Question 23.
A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1. On 1.3.2016 C died. The average profits of the firm for last four years were ₹ 72,000 Books are closed on 31st December. C’s share of profit till the date of his death will be:
(a) ₹ 2,000
(b) ₹ 12,000
(c) ₹ 1,400
(d) ₹ 24,000

Answer

Answer: (a) ₹ 2,000


Question 24.
A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1. C dies and goodwill of the firm is valued at ₹ 60,000. The amount payable to the executor’s of the deceased partner will be :
(a) ₹ 30,000
(b) ₹ 25,000
(c) ₹ 10,000
(d) ₹ 20,000

Answer

Answer: (c) ₹ 10,000


Question 25.
M, L and A are partners sharing profits in the ratio of 9:4:3. They have taken a joint life policy of ₹ 96,000. A dies. What is the share of A in the JLP amount ?
(a) ₹ 18,000
(b) ₹ 24,000
(c) ₹ 54,000
(d) ₹ 20,000

Answer

Answer: (a) ₹ 18,000


Question 26.
Which account is prepared at the time retirement or death of a partner to show the changes in the value of assets and liabilities:
(a) Revaluation A/c
(b) Realisation A/c
(c) Partner’s Capital A/c
(d) None of these

Answer

Answer: (a) Revaluation A/c


Question 27.
What are the methods of calculating share of the deceased partner in the profit of the firm upto the date of death:
(a) On time basis
(b) On sales basis
(c) Both (a) and (b)
(d) None of these

Answer

Answer: (c) Both (a) and (b)


Question 28.
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 A’s executor on account of goodwill ? Good-will is to be calculated on the basis of 2 years purchase of last 3 years average profits. Profits for the last three years are 10,80,000 Rs. :
(a) ₹ 2,16,000 and ₹ 1,42,000
(b) ₹ 2,44,000 and ₹ 2,16,000
(c) ₹ 3,60,000 and ₹ 2,16,000
(d) ₹ 2,16,000 and ₹ 1,44,000

Answer

Answer: (d) ₹ 2,16,000 and ₹ 1,44,000


Question 29.
On death of a partner, his excutor is paid the profits of
the deceased partner for the relevant period. This payment is recorded in Profit & Loss A/c :
(a) Adjustment
(b) Appropriation
(c) Suspense
(d) Reserve

Answer

Answer: (c) Suspense


Question 30.
On the retirement of a partner any accumulated profit should be credited to the capital accounts of:
(a) All partners in old profit-sharing ratio
(b) Remaining partners in new profit-sharing ratio
(c) Retiring partner only in his share
(d) None of these

Answer

Answer: (a) All partners in old profit-sharing ratio


Question 31.
On the retirement of a partner, full amount of goodwill may be credited to the capital accounts of:
(a) Retiring partners
(b) Remaining partners
(c) All partners
(d) None of these

Answer

Answer: (c) All partners


Question 32.
Outgoing partner is compensated for parting with firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation in:
(a) Gaining Ratio
(b) Capital Ratio
(c) Sacrificing Ratio
(d) Profit-sharing Ratio

Answer

Answer: (a) Gaining Ratio


Question 33.
Gaining ratio is calculated :
(a) At the time of admission of a new partner
(b) At the time of retirement of a partner
(c) On the dissolution of partnership firm
(d) None of these

Answer

Answer: (b) At the time of retirement of a partner


Question 34.
How unrecorded assets are treated at the time of retriement of a partner ?
(a) Credited to Revaluation Account
(b) Credited to Capital Account of Retiring Partner
(c) Debited to Revaluation Account
(d) Credited to Partner’s Capital Accounts

Answer

Answer: (a) Credited to Revaluation Account


Question 35.
On the retirement of a partner, profit on revaluation of assets and liabilities should be credited to the Capital Accounts of:
(a) All partners in the old profit-sharing ratio
(b) The remaining partners in their old profit-sharing ratio
(c) The remaining partners in their new profit-sharing ratio
(d) None of these

Answer

Answer: (a) All partners in the old profit-sharing ratio


Question 36.
On retirement of a partner, the retiring Partner’s Capital Account will be credited with:
(a) His/her share of goodwill
(b) Goodwill of the firm
(c) Share of goodwill of remaining partners
(d) None of these

Answer

Answer: (a) His/her share of goodwill


Question 37.
Joint life policy be taken by the firm on the lives of:
(a) All the partners jointly
(b) All the partners separately
(c) All employees of the firm
(d) Both (a) and (b)

Answer

Answer: (d) Both (a) and (b)


Question 38.
A, Band Care equal partners in a firm. B retires and the remaining partners decide to share profits of the new firm in the ratio of 5 : 4. Gaining ratio will be:
(a) 2 : 1
(b) 1 : 2
(c) 4 : 5
(d) 5 : 4

Answer

Answer: (a) 2 : 1


Question 39.
A, B are C are sharing profits in the ratio of \(\frac{1}{2}: \frac{1}{3} \div \frac{1}{6}\) C retired. Gaining ratio will be :
(a) 2 : 1
(b) 2 : 3
(c) 3 : 2
(d) 1 : 2

Answer

Answer: (c) 3 : 2


Question 40.
The amount of General Reserve is transferred to all partner’s capital accounts in:
(a) New Profit-sharing Ratio
(b) Capital Ratio
(c) Old Profit-sharing Ratio
(d) None of these

Answer

Answer: (c) Old Profit-sharing Ratio


Question 41.
Abhishek, Rajat and Vivek are partners sharing profits in the ratio of 5 : 3 : 2. If Vivek retires, the new profit sharing ratio between Abhishek and Rajat will be:
(a) 3 : 2
(b) 5 : 3
(c) 5 : 2
(d) None of these

Answer

Answer: (b) 5 : 3


Question 42.
The balance of Joint Life Policy Account and Joint Life Policy Reserve A/c is:
(a) Always Equal
(b) Always Unequal
(c) Not Necessary
(d) None of these

Answer

Answer: (c) Not Necessary


Question 43.
Anand, Bahadur and Chander are partners sharing profit equally. On Chander’s retirement, his share is acquired by Anand and Bahadur in the ratio of 3: 2. The new profit-sharing ratio between Anand and Bahadur will be:
(a) 8 : 7
(b) 4 : 5
(c) 3 : 2
(d) 2 : 3

Answer

Answer: (a) 8 : 7


Question 44.
Profit and loss on revaluation at the time of retirement is shared by:
(a) Remaining Partners
(b) All Partners
(c) New Partner
(d) None of these

Answer

Answer: (b) All Partners


Question 45.
X, Y, Z are equal partners in a firm. Z retires from the firm. The new profit-sharing ratio between X and Y is 1:2. The gaining ratio will be:
(a) 3 : 2
(b) 2 : 1
(c) 4 : 1
(d) Only Y gains by 1/3

Answer

Answer: (d) Only Y gains by 1/3


Question 46.
X, Y, Z are partners sharing profits in the ratio of 3 : 4 : 4. Y retires and X and Z share their profits in equal ratio. New ratio of X and Z will be :
(a) 1 : 2
(b) 2 : 1
(c) 3 : 1
(d) 1 : 1

Answer

Answer: (d) 1 : 1


Question 47.
A, B and C are partners. Their capitals are ₹ 1,00,000, ₹ 75,000 and ₹ 50,000 respectively. On C’s retirement his share is acquired by A and B in the ratio of 6 : 4 Gaining ratio will be :
(a) 3 : 2
(b) 2 : 2
(c) 2 : 3
(d) None of these

Answer

Answer: (a) 3 : 2


Question 48.
At the time of retirement of partner, firm gets from the insurance company against joint policy taken jointly for all the partners :
(a) Policy Amount + Bonus
(b) Surrender Value
(c) Policy Amount
(d) None of these

Answer

Answer: (b) Surrender Value


Question 49.
Gaining Ratio is :
(a) New Ratio-sacrificing ratio
(b) Old Ratio-sacrificing ratio
(c) New ratio-old ratio
(d) Old ratio-new ratio

Answer

Answer: (c) New ratio-old ratio


Question 50.
Partnership Act provides that interest on amount of capital balance left by the retired partner be paid at:
(a) 5%
(b) 6%
(c) Bank Rate
(d) 8%

Answer

Answer: (b) 6%


Question 51.
Heri, Roy and Prasad are partners and profit-sharing ratio is 3: 5:1. Roy now wants to retire and his share is taken by Prasad. Find the new ratio of Hari and Prasad:
(a) 1 : 2
(b) 2 : 1
(c) 3 : 5
(d) Equal

Answer

Answer: (a) 1 : 2


Question 52.
A, B and C are partners with profit-sharing ratio as 5 :3 :2. A retires. Find the gaining ratio :
(a) 3 : 2
(b) 5 : 3
(c) 5 :2
(d) None of these

Answer

Answer: (a) 3 : 2


Question 53.
Surrender value of an insurance policy means that value:
(a) Which is received an death of a partner
(b) Which is received when a policy matures
(c) Which can be received before the due date of the policy
(d) None of the above

Answer

Answer: (c) Which can be received before the due date of the policy


Question 54.
P, Q and R are partners and share profit in the ratio of 5:3:2. R retires and surrenders 3/5th of his share in favour of P and 2/5th of the share to Q. Find new profit sharing ratio:
(a) 7 : 3
(b) 1 : 2
(c) 31 : 19
(d) None of these

Answer

Answer: (c) 31 : 19


Question 55.
Govind, Hari and Pratap are partners. On retirement of Govind, the goodwill already appears in the Balance Sheet at ₹ 24,000. The goodwill will be written off:
(a) By debiting all Partners’ Capital Accounts in their old profit-sharing ratio
(b) By debiting remaining Partners’ Capital Accounts in their new profit-sharing ratio
(c) By debiting retiring Partner’s Capital Account from his share of goodwill
(d) None of these

Answer

Answer: (a) By debiting all Partners’ Capital Accounts in their old profit-sharing ratio


Question 56.
Goodwill is paid out of the retiring partner in :
(a) Old Profit-sharing Ratio
(b) Capital Ratio
(c) Equal Ratio
(d) None of these

Answer

Answer: (a) Old Profit-sharing Ratio


Question 57.
On retirement of a partner, his share of goodwill is written off among continuing partners in there :
(a) New Profit-sharing Ratio
(b) New Capital Ratio
(c) Gaining Ratio
(d) None of these

Answer

Answer: (c) Gaining Ratio


Question 58.
On retirement of a partner, the retiring partner’s capital account will be credited with :
(a) His/her share of goodwill
(b) Goodwill of the firm
(c) Shares of goodwill of remaining partners
(d) None of these

Answer

Answer: (a) His/her share of goodwill


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