laboursonline – MCQs, Mock Tests | ICSE XII MCQ Questions for Class 12 Accountancy set-3

A and B are partners. C is admitted with 1/5 share. C brings 7 1,20,000 as his share towards capital. The total net worth of the firm is :

1. ₹ 1,00,000
2. ₹ 4,00,000
3. ₹ 1,20,000
4. ₹ 6,00,000

✅ Correct Answer: 4

A and B share profits and losses in the ratio of 3:4. C was admitted for 1/5 th share. New profit sharing ratio will be:

1. 3 : 4 : 1
2. 12 : 16 : 7
3. 16 : 12 : 7
4. None of these

✅ Correct Answer: 2

The opening balance of Partner’s Capital Account is credited with:

1. Interest on Capital
2. Interest on Drawings
3. Drawings
4. Share in loss

✅ Correct Answer: 1

Share of goodwill brought in cash by the new partner is called:

1. Assets
2. Profit
3. Premium
4. None of these

✅ Correct Answer: 3

If the incoming partner brings the amount of goodwill in cash and also a balance exists in Goodwill A/c, then the Goodwill A/c is written off among the old partners:

1. In new profit-sharing ratio
2. In old profit-sharing ratio
3. In sacrificing ratio
4. In gaining ratio

✅ Correct Answer: 2

A and B share profits and losses in the ratio of 3 : 1.C is admitted into partnership for 1/4 share. The sacrificing ratio of A and B is :

1. Equal
2. 3 : 1
3. 2 : 1
4. 3 : 2

✅ Correct Answer: 2

Formula of Sacrificing ratio is:

1. New Ratio – Old Ratio
2. Old Ratio – New Ratio
3. Gain Ratio – Sacrificing Ratio
4. New Ratio – Sacrificing Ratio .

✅ Correct Answer: 2

The accumulated profits and reserves are transferred to:

1. Realisation A/c
2. Partner’s Capital A/cs
3. Bank A/c
4. Savings A/c

✅ Correct Answer: 2

A, B and C are equal partners. D is admitted to the firm for non-ourth share. D brings ₹ 20,000 as capital and ₹ 5,000 being half of the premium for goodwill. The value of goodwill of the firm is :

1. ₹ 10,000
2. ₹ 40,000
3. ₹ 30,000
4. None of these

✅ Correct Answer: 2

On the admission of a new partner, increase in the value of assets is debited to which account ?

1. Revaluation Account
2. Assets Account
3. Old Partners’ Capital Accounts
4. None of these

✅ Correct Answer: 2

Z is admitted in a firm for a 1/4 share in the profit for which he brings 7 30,000 for goodwill. It will be taken away by the old partners X and Y in :

1. Old profit-sharing ratio
2. New profit-sharing ratio
3. Sacrificing ratio
4. Capital ratio

✅ Correct Answer: 3

On the admission of a new partner, the decrease in the value of assets is debited to:

1. Revaluation Account
2. Assets Account
3. Old Partners’ Capital Accounts
4. None of these

✅ Correct Answer: 1

When the new partner pays for goodwill in cash, the amount should be debited in the firm’s book to:

1. Goodwill Account
2. Cash Account
3. Capital Account of new partner
4. None of these

✅ Correct Answer: 2

The balance of Revaluation Account or Profit & Loss Adjustment Account is transferred to Old Partners’ Capital Accounts in their :

1. Old profit-sharing ratio
2. New profit-sharing ratio
3. Equal ratio
4. Capital ratio

✅ Correct Answer: 1

X and Y share profits in the ratio of 3 : 2 Z was admitted as a partner who gets 1/5 share. Z acquires 3/20 from X and 1/20 from Y. The new profit sharing ratio will be :

1. 9 : 7 : 4
2. 8 : 8 : 4
3. 6 : 10 : 4
4. 10 : 6 :4

✅ Correct Answer: 1

At the time of admission of a new partner, Undistributed Profits appearing in the Balance Sheet of the old firm is transferred to the Capital Account of:

1. Old partners is old profit-sharing ratio
2. Old partners in new profit-sharing ratio
3. All the partners in the new profit-sharing ratio
4. None of these

✅ Correct Answer: 1

Z is admitted in a firm for al/4 share in the profit for which he brings 7 30,000 for goodwill. It will be taken away by the old partners X and Y in :

1. Old profit-sharing ratio
2. New profit-sharing ratio
3. Sacrificing ratio
4. Capital ratio

✅ Correct Answer: 3

General Reserval at the time of admission of a new partner is transferred to :

1. Revaluation Account
2. Old Partner’s Capital Account
3. Profit and Loss Adjustment Account
4. Realisation Account

✅ Correct Answer: 2

Change in profit-sharing ratio of existing partners results in:

1. Revaluation of Firm
2. Reconstitutions of Firm
3. Dissolution of Firm
4. None of these

✅ Correct Answer: 2

On reconstitution of a partnership firm, recording of an unrecorded liability wil result in:

1. Gain to the existing partners
2. Loss to the existing partners
3. Neither gain nor loss to the existing partners
4. None of these

✅ Correct Answer: 2

Increase In the value of assets on reconstitution of the partnership firm results into :

1. Gain to the existing partners
2. Loss to the existing partners
3. Neither gain nor loss to the existing partners
4. None of these

✅ Correct Answer: 1

The balance of Revaluation Account is transferred to old Partner’s Capital Accounts in their:

1. Old Profit-sharing Ratio
2. New Profit-sharing Ratio
3. Equal Ratio
4. None of these

✅ Correct Answer: 1

X and Y share profits in the ratio 2 :3. In future they have decided to share profits in equal ratio. Which partner will sacrifice in which ratio ?

1. X sacrifice 1/10
2. Y sacrifice 1/5
3. Y sacrifice 1/10
4. None of these

✅ Correct Answer: 2

Change in the partnership agreement results in:

1. Reconstitution of Firm
2. Dissolution of Firm
3. Amalgamation of Firm
4. None of these

✅ Correct Answer: 1

Change in the partnership agreement:

1. Changes the relationship among the partners
2. Results in end of partnership business
3. Dissolves the partnership firm
4. None of these

✅ Correct Answer: 1

Excess of credit side over the debit side in Revalution Account is:

1. Profit
2. Loss
3. Receipt
4. Expense

✅ Correct Answer: 1

A, B and C are partners in a firm, if D is admitted as a new partner:

1. Old firm is dissolved
2. Old firm and old partnership are dissolved
3. Old partnership is reconstituted
4. None of these

✅ Correct Answer: 3

Recording of an unrecorded asset on the reconstltutlam of a partnership firm will be:

1. A gain to the existing partners
2. A loss to the existing partners
3. Neither a gain nor a loss to the existing partners
4. None of these

✅ Correct Answer: 1

Revaluation Account or Profit & Loss Adjustment Account is a:

1. Personal Account
2. Real Account
3. Nominal Account
4. None of these

✅ Correct Answer: 3

A, B, C and D are partners sharing their profits and losses equally. They change their profit sharing ratio to 2:2:1:1. How much will C sacrifice ?

1. 1/6
2. 1/12
3. 1/24
4. None of these

✅ Correct Answer: 4

Sacrificing Ratio:

1. New Ratio – Old Ratio
2. Old Ratio – New Ratio
3. Gaining Ratio – Old Ratio
4. Old Ratio – Gaining Ratio

✅ Correct Answer: 2

Gaining Ratio:

1. New Ratio – Old Ratio
2. Old Ratio – Sacrificing Ratio
3. New Ratio – Sacrificing Ratio
4. Old Ratio – New Ratio

✅ Correct Answer: 1

X and Y share profit and loss in 3:2. From 1st January, 2017 they agreed to share profit equally. Their sacrifice or gain will be :

1. Sacrifice by X: 1/10
2. Sacrifices by Y : 1/10
3. Both (a) and (b)
4. Non of these

✅ Correct Answer: 3

At the time of admission of a new partner, General Reserve a appearing in the old Balances Sheet is transferred to:

1. All Partner’s Capital Accounts .
2. New Partners’ Capital Accounts
3. Old Partner’s Capital Accounts
4. None of these

✅ Correct Answer: 3

Generally the interest on capital is considered as :

1. An appropriation of profit
2. An Asset
3. An Expense
4. None of these

✅ Correct Answer: 1

Increase in the value of assets on reconstitution of the partnership firm results into:

1. Gain to the existing partners
2. Loss to the existing partners
3. Neither a gain nor a loss to the existing partners
4. None of these

✅ Correct Answer: 1

Following are the factors affecting goodwill except:

1. Nature of business
2. Efficiency of Management
3. Technical Knowledge
4. Location of the Customers

✅ Correct Answer: 3

The profit of the last three years are ₹ 42,000, ₹ 39,000 and ₹ 45,000. Value of goodwill at two years purchases of the average profits will be :

1. ₹ 42,000
2. ₹ 84,000
3. ₹ 1,26,000
4. ₹ 36,000

✅ Correct Answer: 2

Under average profit basis goodwill is calculated by :

1. No. of years’ purchased x Average profit
2. No. of years’ purchased x Super profit
3. Super Profit -r Expected Rate of Return
4. None of these

✅ Correct Answer: 1

Goodwill is:

1. Tangible Asset
2. Intangible Asset
3. Current Asset
4. None of these

✅ Correct Answer: 2

An asset which is not ficitious but intangible in nature, having realisable value is :

1. Machinery
2. Building
3. Furniture
4. Goodwill

✅ Correct Answer: 4

Which of the following is not a method of valuation of Goodwill:

1. Revaluation Method
2. Average Profit Method
3. Super Profit Method
4. Capitalisation Method

✅ Correct Answer: 1

The excess of average profits over the normal profits are called :

1. Super Profits
2. Fixed Profits
3. Abnormal Profits
4. Normal Profits

✅ Correct Answer: 1

Goodwill is a…………….asset

1. Useless
2. Tangible
3. Worthless
4. Valuable

✅ Correct Answer: 3

Under super profit basis goodwill is calculated by :

1. No. of years’ purchased x Average Profit
2. No. of years’ purchased x Super profit
3. Super profit -r Expected rate of return
4. None of these

✅ Correct Answer: 2

Profits of the last three years were ₹ 6,000, ₹ 13,000 and ₹ 8,000 respectively. Goodwill at two years purchase of the average net profit will be :

1. ₹ 81,000
2. ₹ 27,0000
3. ₹ 9,000
4. ₹ 18,000

✅ Correct Answer: 4

What do you mean by Super Profit ?

1. Total Profit/No. of Years
2. Average Profit – Normal Profit
3. Weighted Profit/No. of Years’ Purchase
4. None of these

✅ Correct Answer: 2

Capital employed in a business is ₹ 1,50,000. Profits are ₹ 50,000 and the normal rate of profit is 20%. The amount of goodwill as per capitalisation method will be:

1. ₹ 2,00,000
2. ₹ 1,50,000
3. ₹ 3,00,000
4. ₹ 1,00,000

✅ Correct Answer: 4

Weighted average method of calculating goodwill is used when:

1. Profits are equal
2. Profit has increasing trend
3. Profit has decreasing trend
4. Either (b) or (c)

✅ Correct Answer: 4

The monetary value of reputation of the business is called:

1. Goodwill
2. Super Profit
3. Surplus
4. Abnormal Profit

✅ Correct Answer: 1