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Admission of New Partner MCQs
Admission of a new partner means the entry of a new partner in the current business is known as an Admission of a partner with the concept of other partners. The incoming partner will bring some cash as Capital for business. According to Section 31 of the Indian Partnership Act 1932, a person can be admitted into a partnership only with the consent of all existing partners unless otherwise agreed.
Admission of a partner MCQs: This section contains multiple-choice questions and answers on the Admission of a partner. It will help the students to prepare well for their exams and to test their skills on Admission of a partner.
List of Admission of New Partner MCQs
1. When goodwill existing in the books is written off at the time of admission of a partner, it is transferred partners capital account in their:
- Old profit-sharing ratio
- New profit-sharing ratio
- Sacrificing ratio
- Gaining ratio
Answer: A) Old profit-sharing ratio
Explanation:
When goodwill existing in the books is written off at the time of admission of a partner, then it should be written off among the old partner's itself in their old profit-sharing ratio.
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2. New partner can be admitted into partnership:
- With the consent of any one partner
- With the consent of majority of partner
- With the consent of all the partners
- With the consent of 2/3rd of old partners
Answer: C) With the consent of all the partners
Explanation:
According to the Partnership Act 1932, New partner can be admitted into partnership with the consent of all the partners.
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3. Profit or Loss on revaluation of assets and reassessment of liabilities is transferred to partners capital account in their:
- Capital ratio
- Equal ratio
- Old profit-sharing ratio
- Gaining ratio
Answer: C) Old profit-sharing ratio
Explanation:
Profit or Loss on revolution of each asset and reassessment of liabilities is transferred to the partners capital account in their old profit-sharing ratio.
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4. If at the time of admission, there is some unrecorded liability it will be:
- Debited to revaluation account
- Credited to revaluation account
- Debited to revaluation account
- Credited to revaluation account
Answer: A) Debited to revaluation account
Explanation:
A revaluation account is a nominal account, prepared for the distribution and transfer of profits and losses arising from the increase and decrease in the carrying amount of assets and liabilities at the time of changing profit-sharing ratio, partner acceptance, partner retirement. and the death of a partner. Inflation, unrecorded assets, depreciation of liabilities are credited to the revaluation account and Depreciation of assets, Increased liability and non-recorded liabilities are debited from revaluation account.
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5. Goodwill delivered by an incoming partner is still distributed among older colleagues in theirs:
- Old profit-sharing ratio
- New profit-sharing ratio
- Gaining ratio
- Sacrificing ratio
Answer: D) Sacrificing ratio
Explanation:
In the case of a partner's acceptance, goodwill will not be raised in the firm's books for financial or financial reasons; the amount is paid for it. If an incoming partner brings any premium in addition to his or her major contribution at the time of his or her admission, that premium should be allocated to other existing partners. When a new partner is accepted into the company, the old partner usually sacrifices to reap the new partner at a lower rate of future profit sharing. Therefore, the interest payment brought by the new partner will be given to existing partners on the basis of the profit sacrificing ratio.
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6. Ashish and Rijul are partners in a business sharing profits and losses in the ratio of 7:3 respectively. They admit Premraj as a new partner. Ashish sacrificed 1/7th share of his profit and Rijul sacrificed 1/3rd of his share in favour of Premraj. The new profit sharing ratio of Ashish, Rijul and Premraj will be:
- 3 : 1 : 1
- 2 : 1 : 1
- 2 : 2 : 1
- None of the above
Answer: A) 3 : 1 : 1
Explanation:
The new profit sharing ratio of Ashish, Rijul and Premraj will be 3 : 1 : 1.
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7. Megha and Tapan are partners in a firm sharing profits and losses in the ratio of 2:3. Mehak is admitted for 1/5th share in the profits of the firm. If Mehak gets it wholly from Megha, the new profit-sharing ratio after Mehak's admission will be:
- 1 : 3 : 3
- 3 : 1 : 1
- 2 : 2 : 1
- 1 : 3 : 1
Answer: D) 1 : 3 : 1
Explanation:
The new profit-sharing ratio after Mehak's admission will be 1 : 3 : 1
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8. Goodwill of a firm of Bharat and Nikhil is valued at ₹30,000. It is appearing in the books at ₹12,000. Raghav is admitted for 1/4th share. What amount he is supposed to bring for goodwill?
- ₹ 30,000
- ₹ 4,500
- ₹ 7,500
- ₹ 10,500
Answer: C) ₹ 7,500
Explanation:
Raghav is admitted for 1/4th share and he is supposed to bring ₹7,500 for goodwill.
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9. When a new partner brings his share of goodwill in cash, it will be shared with older partners at:
- Ratio of sacrifice
- Old profit-sharing ratio
- New profit-sharing ratio
- In capital ratio
Answer: A) Ratio of sacrifice
Explanation:
If the new partner is accepted by the old partner, he must give up his profit ratio in order to compensate the old partner and divide the favour according to their sacrificing ratio.
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10. Ankita and Bhushan partners share profits and losses in a ratio of 7: 5. They agree to accept Chandan, their manager, in a partnership that receives 1/6 of the profits. He acquires this share as 1/24th from Ankita and 1/8th from Bhushan, the new profit sharing ratio will be:
- 13 : 7 : 4
- 7 : 13 : 4
- 7 : 5 : 6
- 5 : 7 : 6
Answer: A) 13 : 7 : 4
Explanation:
The new profit sharing ratio will be 13 : 7 : 4.
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