Series -5 Objective Type Question / MCQs with Answer by CA. (Dr.) G. S. GREWAL posted on Whatsapp Group

CA. (Dr.) G. S. GREWAL

Objective Type Question / MCQs

posted on Whatsapp Group

Question Series 5

*True/False *
1. The claim of Workmen Compensation is less than Workmen Compensation Reserve at the time of admission of a partner. The difference is Workmen Compensation Reserve and claim will be transferred to Capital Accounts of the old partners in their old profit sharing ratio.

*Fill in the Blank *
2. If book value and the market value of investment is same, Investment Fluctuation Reserve at the time of Admission of a Partner, is distributed among _____ in their _______.

Multiple Choice Question
3. A, B and C are partners sharing profits and losses in the ratio 6 : 3 : 3, they agreed to take D, as new partner with 1/8th Share of profits. The new profit sharing ratio will be:
(a) 14 : 7 : 7 : 4
(b) 1 : 1 : 1 : 1
(c) 12 : 27 : 36 : 42
(d) 12 : 36 : 27 : 42.

Answer – Question Series 5

Fill in the Blanks: -
1. * Partner’s Capital, Old Profit Sharing *

True / False: -
2. * True *
Reason: If claim is more than reserve then for the deficit Revaluation Account is debited.

Multiple Choice Questions: -
3. * a *
Reason: - As D is admitted for a share of 1/8th, therefore the remaining share of 7/8th will be shared by the old partner’s, in the ratio 6 : 3 : 3, and the new ratio will be 14 : 7 : 7 : 4.

Series -4 Objective Type Question / MCQs with Answer by CA. (Dr.) G. S. GREWAL posted on Whatsapp Group

CA. (Dr.) G. S. GREWAL

Objective Type Question / MCQs

posted on Whatsapp Group

Question Series 4

Fill in the Blanks: -
1. Partners may or may not have written ________.

True / False
2. Partnership is the relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all.

Multiple Choice Question
3. In case partners have guaranteed profit to a partner and deficiency of profit. The deficiency happens it is borne by
(a) All the partners in new profit sharing ratio
(b) Remaining partners in the ratio in which they have given guarantee
(c) All the partners in sacrificing ratio.
(d) All the partners in old profit sharing ratio.

Answer – Question Series 4

Fill in the Blank
1. Partnership Deed

True / False
2. * True *
Reason It is one of the essential characteristic of Partnership that it is a relation between persons who have agreed to share profits of business carried on by all or any of them acting for all.

Multiple Choice Question
3. *  b * 
Reason The Partners have an agreement with the other partner to give him a minimum profit. The deficiency thus, will be borne by the guaranteeing partner in the ratio in which they have guaranteed the minimum profit. If the ratio of guarantee is not given, they will share the deficiency in their profit – sharing ratio.

Series -3 Objective Type Question / MCQs with Answer by CA. (Dr.) G. S. GREWAL posted on Whatsapp Group

CA. (Dr.) G. S. GREWAL

Objective Type Question / MCQs

posted on Whatsapp Group

Question Series 3

Fill in the Blank

1. Goodwill is valued with a purpose to compensate ______ partner(s) by the ______ partners.

True / False

2. Large Customer base results in higher valuation of Goodwill.

Multiple Choice Question

3. Which of the following statement is Correct?                      

(a) Goodwill is a fictitious asset. 

(b) Goodwill is a current asset.

(c) Goodwill is a wasting asset.

(d) Goodwill is an intangible asset.

Answer – Question Series 3

Fill in the Blank
1. Sacrificing, Gaining

True / False
2. * True *
Reason If a customer is large in size then they demand more of good and ultimately goodwill of that product increases.

Multiple Choice Questions: -
3. * d * 
Reason Goodwill is an intangible asset as it cannot be seen or touched but has a value.

Series -2 Objective Type Question / MCQs with Answer by CA. (Dr.) G. S. GREWAL posted on Whatsapp Group

CA. (Dr.) G. S. GREWAL

Objective Type Question / MCQs

posted on Whatsapp Group

Question Series 2

Fill in the Blanks

1. The ratio in which one or more partners of the firm forego i.e.,
sacrifice their share of profits in favour of one or more partners of the firm is called _______.

True / False

2. Sudhir and Bhuwan are partners in firm sharing profits in the ratio of 3:2. They decided to share future profit equally. On the date of change in profit sharing ratio, Profit and Loss Account has a debit balance of Rs. 50,000. It will be adjusted in Partners Capital Accounts by passing the following Journal Entry:
Sudhir’s Capital A/c   …Dr. 30,000
Bhuwan’s Capital A/c   …Dr. 20,000
         To Profit and Loss A/c   50,000.

Multiple Choice Questions

3. Gaining Ratio is calculated by deducting
(a) Sacrificed profit share from new profit share of the partner.
(b) Sacrificed profit share from old profit share of the partner.
(c) New profit share from old profit share of the partner.
(d) Old profit share from new profit share of the partner.

Answer – Question Series -2

Fill in the Blanks

1. * Sacrificing Ratio *

True / False
2. * True *
Reason: Profit and Loss Account (Dr.) is shown on the Assets side of Balance Sheet and is an accumulated loss distributed among old partners in old profit sharing ratio.
Sudhir’s Share = 50,000 X 3/5 = Rs. 30,000
Bhuwan’s Share = Rs. 50,000 X 2/5 = Rs. 20,000.

Multiple Choice Questions
3. * d * 

Reason: - Gaining ratio means increase in share. Thus, new profit share will be higher than the old profit share. Therefore, Gaining Ratio = New Ratio – Old Ratio.

Series -1 Objective Type Question / MCQs with Answer by CA. (Dr.) G. S. GREWAL posted on Whatsapp Group

CA. (Dr.) G. S. GREWAL

Objective Type Question / MCQs

posted on Whatsapp Group

Question Series 1

Not for Profit Organisations

True / False: -

1. Under NPO, sale of old newspaper is shown as an income.

Fill in the Blanks: -

2. Token payment made to a person, who voluntarily undertakes a service which would normally command a fee is _______.

Multiple Choice Questions: -

3. Income and Expenditure Account is based on

(a) Cash Basis of Accounting.

(b) Accrual Basis of Accounting.

(c) Mixed Basis of Accounting.

(d) Management Accounting.

Answer – Question Series 1

True / False: -

1. [ True ]

Reason: By selling the old newspaper amount is credited to Income and Expenditure Account. Thus, it is Revenue Receipt and treated as an Income.

Fill in the Blanks: -

2. [ Honorarium ]

3. Multiple Choice Questions: -

 [b]

Reason: Income and Expenditure Account is based on Accrual Accounting, i.e., it records items of revenue nature whether received or not relating to current accounting year.