On the retirement of a partner any reserve being should be transferred to the capitalaccount of:

remaining partners in the new profit sharing ratio

all partners in the old profit sharing ratio

remaining partners in the new profit sharing ratio

neither the retiring partner, nor the remaining partner

The accounting procedure at the retirement of partner is valued:

revaluation of assets and liabilities

ascertaining his share of goodwill

In the revaluation account an increase in the value of land and building:

appears on the credit side of good will account

In the revaluation account a decrease in the value of plant and machinery:

appears on the debit side of good will account

At the time of a new partner Goodwill:

belongs to all partners, new and old

belongs only to the new partners who is going to be admitted

belongs only to the old partner who have credited it

A new partner may be admitted to a partnership:

with the consent of two third of old partners

with the consent of all partners

with the consent of two third of old partners

with the consent of any one of the partners

without consent of old partners

At the time of admission of a new partner, general reserve is:

allowed to remain is balance sheet

debited to capital of old partners

credited to capital of old partners

allowed to remain is balance sheet

At the time of admission an incoming partner contributes as goodwill:

may or may not pay cash for goodwill

Interest on capital Account:

only credited to partners capital a/c

debit to profit & loss and credited to partners capital a/c

only credited to partners capital a/c

Salary paid to partner should be:

credited to profit & loss appropriation a/c

Under Final A/c system, the profit or loss made by the branch is determined by preparing

branch trading & profit &loss a/c

1706 + Mcqs in Financial Accounting in Finance & Accounting Page 3 McqOptions

101.	On the retirement of a partner any reserve being should be transferred to the capitalaccount of:
A.	all partners in the old profit sharing ratio
B.	remaining partners in the new profit sharing ratio
C.	neither the retiring partner, nor the remaining partner
D.	none of above
Answer» B. remaining partners in the new profit sharing ratio

Discussion

102.	The loss or gain an account of revaluation at the time of retirement of a partner is sharedby:
A.	remaining partners
B.	retiring partner
C.	all partners
D.	none of above
Answer» D. none of above

Discussion

103.	An account operated to ascertain the loss or gain at the death of a partner is called:
A.	realization account
B.	revaluation account
C.	execution account
D.	deceased partner a/c
Answer» C. execution account

Discussion

104.	If the remaining partner want to continue the business, after the retirement of a partner, anew partnership agreement:
A.	necessary
B.	not necessary
C.	optioned
D.	none of above
Answer» B. not necessary

Discussion

105.	Amount due to outgoing partner is shown in the balance sheet as his:
A.	liability
B.	asset
C.	capital
D.	loan
Answer» E.

Discussion

106.	The accounting procedure at the retirement of partner is valued:
A.	revaluation of assets and liabilities
B.	ascertaining his share of goodwill
C.	finding the amount due to him
D.	all of above
Answer» E.

Discussion

107.	Partners equity is effected due to:
A.	retirement of a partner
B.	admission of a partner
C.	death of a partner
D.	all of above
Answer» E.

Discussion

108.	Revaluation account is operated to find out gain or loss at the time of:
A.	admission of a partner
B.	retirement of a partner
C.	death of a partner
D.	all of above
Answer» E.

Discussion

109.	In case of retirement of a partner full good will is credited to the accounts of:
A.	all partners
B.	only retiring partner
C.	only remaining partner
D.	none of the above
Answer» B. only retiring partner

Discussion

110.	The partnership may come to an end due to the:
A.	death of a partner
B.	insolvency of partner
C.	by giving notice
D.	all of the above
Answer» E.

Discussion

111.	In the revaluation account an increase in the value of land and building:
A.	appears on the debit side
B.	appears on the credit side
C.	appears on the credit side of good will account
D.	does not appear at all
Answer» C. appears on the credit side of good will account

Discussion

112.	In the revaluation account a decrease in the value of plant and machinery:
A.	appears on the debit side
B.	appears on the credit side
C.	appears on the debit side of good will account
D.	does not appear at all
Answer» B. appears on the credit side

Discussion

113.	At the time of a new partner Goodwill:
A.	belongs to all partners, new and old
B.	belongs only to the new partners who is going to be admitted
C.	belongs only to the old partner who have credited it
D.	none of the above.
Answer» D. none of the above.

Discussion

114.	A new partner may be admitted to a partnership:
A.	with the consent of all partners
B.	with the consent of two third of old partners
C.	with the consent of any one of the partners
D.	without consent of old partners
Answer» B. with the consent of two third of old partners

Discussion

115.	At the time of admission of a new partner, general reserve is:
A.	debited to capital of old partners
B.	credited to capital of old partners
C.	allowed to remain is balance sheet
D.	debited to current account
Answer» C. allowed to remain is balance sheet

Discussion

116.	An incoming partner pays his share of goodwill in cash, and profit sharing ration of oldpartner is changed, Goodwill be distributed among old partners:
A.	as their old profit ratio
B.	according to new ration
C.	according to sacrifice ratio
D.	none of these
Answer» D. none of these

Discussion

117.	Goodwill of the firm is valued Rs. 30000. C an incoming partner purchase ¼ share of totalprofit Goodwill be raised in the books.
A.	rs. 30000
B.	rs. 7500
C.	rs. 120000
D.	rs. 7000
Answer» B. rs. 7500

Discussion

118.	Value of goodwill agreed upon Rs. 30000 on C, S admission and allowing him ¼ shareof total profit Goodwill is brought in cash, the amount of goodwill be as:
A.	rs. 30000
B.	rs. 7500
C.	rs. 150000
D.	rs. 120000
Answer» C. rs. 150000

Discussion

119.	Goodwill is valued as two years purchase of the average profits of three previous yearsare Rs. 15000, the value of goodwill be:
A.	rs. 15000
B.	rs. 30000
C.	rs. 20000
D.	rs. 50000
Answer» C. rs. 20000

Discussion

120.	At the time of admission an incoming partner contributes as goodwill:
A.	in cash
B.	does not pay cash
C.	may or may not pay cash for goodwill
D.	none of these.
Answer» D. none of these.

Discussion

121.	At the time of admission of a new partner the firm is:
A.	dissolved
B.	continued
C.	not effected
D.	re-organized
Answer» B. continued

Discussion

122.	Interest on capital Account:
A.	debited to profit & loss a/c
B.	credit to profit & loss a/c
C.	debit to profit & loss and credited to partners capital a/c
D.	only credited to partners capital a/c
Answer» D. only credited to partners capital a/c

Discussion

123.	Salary paid to partner should be:
A.	debited to his current a/c
B.	credited to his current a/c
C.	credited to profit & loss appropriation a/c
D.	none of above
Answer» E.

Discussion

124.	A partners has to pay interest on drawings what is the entry in the personal A/c of thepartner?
A.	credit partners capital a/c
B.	credit partners current a/c
C.	debit the partners current a/c
D.	debit partners current a/c
Answer» E.

Discussion

125.	Drawings of the partners are:
A.	debited to profit & loss a/c
B.	credited to profit & loss a/c
C.	credited to capital a/c
D.	debited to capital a/c
Answer» E.

Discussion

126.	Capital of the partners are maintained by:
A.	fixed capital method
B.	fluctuating capital methods
C.	by any two above methods
D.	none of them.
Answer» D. none of them.

Discussion

127.	Liability of partners in a partnership business is:
A.	limited
B.	un-limited
C.	limited & unlimited
D.	none of these
Answer» C. limited & unlimited

Discussion

128.	The members of partnership firm are individually called as:
A.	director
B.	investor
C.	partner
D.	manager
Answer» D. manager

Discussion

129.	Under fixed capital methods, profit will be credited to:
A.	capital account
B.	drawings
C.	current a/c
D.	profit & loss
Answer» D. profit & loss

Discussion

130.	The written agreement of partnership is called:
A.	partnership deed
B.	articles of association
C.	memorandum of association
D.	certificate of incorporation
Answer» B. articles of association

Discussion

131.	Any partner who investments in the business but does not take active part in the businessis:
A.	secret partner
B.	sleeping partner
C.	active partner
D.	nominal partner
Answer» C. active partner

Discussion

132.	Partnership is formed by the partners by:
A.	written agreement
B.	oral agreement
C.	written or oral
D.	none of these
Answer» D. none of these

Discussion

133.	Investment in partnership is made by introducing:
A.	cash
B.	none – cash assets
C.	cash or non – cash assets
D.	none of these.
Answer» D. none of these.

Discussion

134.	Current accounts of the partners should be opened when the capitals are:
A.	fluctuating
B.	fixed
C.	either fixed or fluctuating
D.	none of these
Answer» C. either fixed or fluctuating

Discussion

135.	In the absence of an agreement profit and loss are divided by partners in the ratio of:
A.	capital
B.	equally
C.	time devoted by each partners
D.	none of these.
Answer» C. time devoted by each partners

Discussion

136.	In the absence of an agreement, Interest on loan advanced by the partner to the firm isallowed at the rate of:
A.	6%
B.	5%
C.	12%
D.	9%
Answer» B. 5%

Discussion

137.	The balance of branch adjustment account is transferred to _________ account
A.	branch stock
B.	branch p&l
C.	branch debtors
D.	branch expenses
Answer» C. branch debtors

Discussion

138.	An ordinary partnership business can have:
A.	not more than 50 partners
B.	not more than 20 partners.
C.	any number of partners.
D.	any number than 2 partners.
Answer» C. any number of partners.

Discussion

139.	The profit included in surplus or shortage of stock is transferred to ______ account
A.	branch stock
B.	branch expenses
C.	branch adjustment
D.	branch p&l
Answer» D. branch p&l

Discussion

140.	____________ account shows the shortage or surplus of stock.
A.	branch adjustment
B.	branch stock
C.	goods sent to branch
D.	branch p&l
Answer» C. goods sent to branch

Discussion

141.	____________ account is prepared to adjust the loads included in the value of openingstock and closing stock.
A.	branch stock
B.	branch adjustment
C.	stock reserve
D.	branch p&l
Answer» C. stock reserve

Discussion

142.	The stock reserve for unrealised profit will be ________ to the H.O profit & Loss A/C
A.	debited
B.	credited
C.	first credited then debited
D.	not shown
Answer» E.

Discussion

143.	The difference between goods sent by H.O. and received by branch is known as _______
A.	goods in transit
B.	goods in warehouse
C.	goods in production
D.	goods in godown
Answer» B. goods in warehouse

Discussion

144.	Branch Trading & Profit & Loss A/c is prepared to incorporate all _____
A.	revenue items
B.	capital items
C.	asset items
D.	past items
Answer» B. capital items

Discussion

145.	All branch expenses such as rent, salary are paid by H.O in case of:
A.	independent branch
B.	local branch
C.	dependent branch
D.	foreign branch
Answer» D. foreign branch

Discussion

146.	Dependent branch makes:
A.	cash sales only
B.	credit sales only
C.	cash & credit sales
D.	instalment sales
Answer» D. instalment sales

Discussion

147.	The Branch Account prepared under Final Account System is the nature of:
A.	nominal account
B.	real account
C.	personal account
D.	general account
Answer» B. real account

Discussion

148.	Under Final A/c system, the profit or loss made by the branch is determined by preparing
A.	branch stock a/c
B.	branch debtors a/c
C.	branch adjustment a/c
D.	branch trading & profit &loss a/c
Answer» E.

Discussion

149.	In final account system, Branch Trading and Profit & Loss A/c is prepared at ________
A.	invoice price
B.	cost price
C.	cost & invoice price
D.	market price
Answer» D. market price

Discussion

150.	Branch Trading &Profit & Loss A/c is only a _________ account not forming part of thefull accounting system.
A.	single
B.	memorandum
C.	capital
D.	double
Answer» C. capital

Discussion

Explore topic-wise MCQs in Finance & Accounting.

On the retirement of a partner any reserve being should be transferred to the capitalaccount of:

The loss or gain an account of revaluation at the time of retirement of a partner is sharedby:

An account operated to ascertain the loss or gain at the death of a partner is called:

If the remaining partner want to continue the business, after the retirement of a partner, anew partnership agreement:

Amount due to outgoing partner is shown in the balance sheet as his:

The accounting procedure at the retirement of partner is valued:

Partners equity is effected due to:

Revaluation account is operated to find out gain or loss at the time of:

In case of retirement of a partner full good will is credited to the accounts of:

The partnership may come to an end due to the:

In the revaluation account an increase in the value of land and building:

In the revaluation account a decrease in the value of plant and machinery:

At the time of a new partner Goodwill:

A new partner may be admitted to a partnership:

At the time of admission of a new partner, general reserve is:

An incoming partner pays his share of goodwill in cash, and profit sharing ration of oldpartner is changed, Goodwill be distributed among old partners:

Goodwill of the firm is valued Rs. 30000. C an incoming partner purchase ¼ share of totalprofit Goodwill be raised in the books.

Value of goodwill agreed upon Rs. 30000 on C, S admission and allowing him ¼ shareof total profit Goodwill is brought in cash, the amount of goodwill be as:

Goodwill is valued as two years purchase of the average profits of three previous yearsare Rs. 15000, the value of goodwill be:

At the time of admission an incoming partner contributes as goodwill:

At the time of admission of a new partner the firm is:

Interest on capital Account:

Salary paid to partner should be:

A partners has to pay interest on drawings what is the entry in the personal A/c of thepartner?

Drawings of the partners are:

Capital of the partners are maintained by:

Liability of partners in a partnership business is:

The members of partnership firm are individually called as:

Under fixed capital methods, profit will be credited to:

The written agreement of partnership is called:

Any partner who investments in the business but does not take active part in the businessis:

Partnership is formed by the partners by:

Investment in partnership is made by introducing:

Current accounts of the partners should be opened when the capitals are:

In the absence of an agreement profit and loss are divided by partners in the ratio of:

In the absence of an agreement, Interest on loan advanced by the partner to the firm isallowed at the rate of:

The balance of branch adjustment account is transferred to _________ account

An ordinary partnership business can have:

The profit included in surplus or shortage of stock is transferred to ______ account

____________ account shows the shortage or surplus of stock.

____________ account is prepared to adjust the loads included in the value of openingstock and closing stock.

The stock reserve for unrealised profit will be ________ to the H.O profit & Loss A/C

The difference between goods sent by H.O. and received by branch is known as _______

Branch Trading & Profit & Loss A/c is prepared to incorporate all _____

All branch expenses such as rent, salary are paid by H.O in case of:

Dependent branch makes:

The Branch Account prepared under Final Account System is the nature of:

Under Final A/c system, the profit or loss made by the branch is determined by preparing

In final account system, Branch Trading and Profit & Loss A/c is prepared at ________

Branch Trading &Profit & Loss A/c is only a _________ account not forming part of thefull accounting system.