Class 12 Accountancy MCQs Retirement of Partner
All these MCQs are from Retirement of Partner chapter for practice purposes to prepare for final Exam. DO these questions after preparing the chapter thoroughly. Not your time for speed and accuracy.
- Peter, Kaef and Ralaph are partners sharing profits in the ratio of 8:5:3. Kaef retires. Peter takes 1/8 share from Kaef and Ralaph takes 3/16 share from Kaef. What will be the new profit-sharing ratio?
a) 1:1
b) 10:6
c) 9:7
d) 5:3
2. Hema, Hena and Reena are partners sharing profits and losses in the ratio of 4:3:2. Hena retires and surrenders 1/9th of her share in favour of Hema and the remaining in favour of Reena. The new profit-sharing ratio will be:
a) 8:1
b) 14:13
c) 1:8
d) 13:14
3. If goodwill is already appearing in the books of accounts at the time of retirement, then it should be written off in :
a) Sacrificing Ratio
b) Old Profit-Sharing Ratio
c) New Profit-Sharing Ratio
d) Gaining Ratio
4. As per Section 37 of the Indian Partnership Act, 1932, interest @......is payable to the retiring partner if full or part of his dues remain unpaid:
a) 9% m.
b) 12% p.m.
c) 6% p.m.
d) None of the above
5. On retirement of a partner, debtors of ₹48,000 were shown in the Balance sheet. Out of this ₹6,000 became bad. One debtor became insolvent. 60% were recovered from him out of ₹20,000. Full amount is expected from the balance debtors. On account of this item loss in revaluation account will be:
a) ₹10,200
b) ₹14,000
c) ₹7,000
d) ₹4,000
6. On retirement of a partner, debtors of ₹72,000 were shown in the Balance sheet. Out of this ₹8,000 became bad. 70% were recovered from the balance debtors. On account of this item loss on revaluation account will be:
a) ₹4,000
b) ₹24,000
c) ₹27,200
d) None of these
7. As per section ………..of the Indian Partnership Act, a retiring partner becomes entitled to profits after retirement if his dues remain unpaid:
a) Section 73
b) Section 26
c) Section 4
d) Section 37
8. At the time of retirement, amount remaining in Investment Fluctuation Reserve after meeting the fall in value of Investment is:
a) Credited in Sacrificing Ratio
b) Credited in New Profit-Sharing Ratio
c) Credited in Old Profit-Sharing Ratio
d) Credited in Gaining Ratio
9. If at the time of retirement, there is some unrecorded asset, it will be………… to……….. Account.
a) Debited, Revaluation
b) Credited, Revaluation
c) Debited, Goodwill
d) Credited, Partners’ Capital
10. Keerat, Seerat and Teerth were partners sharing profits in the ratio 3:2:1. Keerat retired and his dues towards the firm including Capital balance, Accumulated profits and losses share, Revaluation Gain amounted to ₹5,80,000. Keerat was being paid ₹7,00,000 in full settlement. For giving that additional amount of ₹1,20,000, Seerat was debited for ₹40,000. Determine goodwill of the firm.
a) ₹1,20,000
b) ₹80,000
c) ₹2,40,000
d) ₹3,60,000
Class 12 Accountancy MCQs Retirement of Partner
11. An amount of ₹50,000 was payable to the retiring partner and it was brought in by the remaining partners in the ratio 3:2. What will be the effect on bank/cash balance in the reconstituted balance sheet?
a) Increase in Balance by ₹ 50,000
b) Decrease in Balance by ₹ 50,000
c) No Change in Cash Balance
d) Decrease in Balance by ₹ 1,00,000
12. Section 37 of the Partnership Act states that the outgoing partner is entitled to:
a) Proportionate share in profits
b) Interest on Loan dues @ 6% p.a
c) Immediate payment of dues
d) Either of (a) or (b)
13. Ranjeet Associates is having three partners named as Ranjeet, Lakhwinder and Surjeet. Their Capitals were ₹ 4,00,000; ₹ 2,40,000 and ₹ 1,60,000 respectively. Surjeet retired on March 31, 2024 and sold her share of profits by taking ₹ 30,000 from Ranjeet and ₹ 20,000 from Lakhwinder. The new ratio would be:
a) 1 : 1
b) 7 : 8
c) 3 : 2
d) 8 : 7
14. A, B and C are partners sharing profits and losses in the ratio 5:4:1. B retired on 31st March 2024 and her dues came out to be ₹ 7,20,000. Amount of ₹ 1,20,000 was paid immediately and balance was to be paid in three equal annual instalments together with interest @ 10% per annum. Determine the amount payable to B on 31st March 2027.
a) ₹ 2,00,000
b) ₹ 2,20,000
c) ₹ 2,40,000
d) ₹ 2,88,000
15. Amna, Beena and Seema were partners in a firm sharing profits in the ratio of 2: 2: 1. Seema retired. The balance in her capital account after adjustments regarding reserves, accumulated profits/loss and revaluation of assets and liabilities was ₹ 3,40,000. Seema was paid ₹ 4,00,000 including her share of goodwill. The Goodwill was valued at:
a) ₹ 60,000
b) ₹ 3,00,000
c) ₹ 1,00,000
d) ₹ 12,000
16. Titu, Mitu and Kitu are partners sharing profits in the ratio of 4:3:2. Mitu retired and his capital after making adjustment for reserves and profit on revaluation was determined to be ₹4,64,000. Titu and Kitu agreed to pay him ₹5,00,000 in settlement of his dues. For the excess amount given, Titu was debited by ₹19,500. Value of firm's goodwill will be:
a) ₹1,84,000
b) ₹1,06,000
c) ₹1,62,000
d) ₹1,08,000
17. Assertion: Retiring partner is entitled to his share of goodwill at the time of retirement.
Reason: goodwill earned by the firm is result of efforts of all existing partners in the past.
a) Assertion is true, reason is false.
b) Assertion is false, reason is true
c) Both Assertion and reason are true and reason is correct explanation of assertion.
d) Assertion and reason both are true but reason is not the correct explanation of assertion.
18. Red, Blue and Green are partners sharing profits and losses in the ratio of 5: 3 :2. Red retires, and goodwill is valued at ₹60,000. New profit-sharing ratio of Blue and Green will be equal. For the adjustment of goodwill, Blue and Green’s capital accounts will be debited by:
a) ₹ 18,000 and ₹12,000 respectively.
b) ₹12,000 and ₹18,000 respectively.
c) ₹20,000 and ₹10,000 respectively.
d) ₹10,000 and ₹20,000 respectively.
19. A, B and C are partners in a firm. B retires and his claim including his capital and his share of goodwill is ₹ 1,20,000. He is paid partly in cash and partly in kind. A machine valued at ₹ 60,000 unrecorded in the books of the firm and the balance in cash is given to him to settle his account. The amount of cash to be paid to B will be:
a) ₹ 80,000
b) ₹ 60,000
c) ₹ 40,000
d) ₹ 30,000
20. Assertion (A): The partners whose profit shares have increased as result of change in profit sharing ratio are known as gaining partners.
Reason(R): Gaining ratio = new ratio - old ratio
a) Both A and R are correct, and R is the correct explanation of A.
b) Both A and R are correct, but R is not the correct explanation of A.
c) A is correct but R is wrong
d) A is wrong but R is correct.
More questions will be added from time to time...
Class 12 Accountancy MCQs Retirement of Partner - Answers
- d) 5:3
- d) 13:14
- b) Old Profit-Sharing Ratio
- d) None of the above
- b) ₹14,000
- c) ₹27,200
- d) Section 37
- c) Credited in Old Profit-Sharing Ratio
- b) Credited, Revaluation
- c) ₹2,40,000
- c) No Change in Cash Balance
- d) Either of (a) or (b)
- d) 8 : 7
- b) ₹ 2,20,000
- b) ₹ 3,00,000
- d) ₹1,08,000
- c) Both Assertion and reason are true and reason is correct explanation of assertion.
- b) ₹12,000 and ₹18,000 respectively
- b) ₹ 60,000
- a) Both A and R are correct, and R is the correct explanation of A.