Accountancy: CUET Mock Test - 1
40 Questions MCQ Test CUET Mock Test Series | Accountancy: CUET Mock Test - 1
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In the absence of partnership deed or the partnership being silent, the Partnership Act, 1932 provides for no interest on
In absence of partnership deed, ______ partner gets more share of profit.
Profits are shared equally.
Salary to a partner is _____ with respect to profit.
What is the average period in case the partner withdraws consistently at the end of each quarter for a year?
A partner withdraws ₹ ______ on 30th September, 2021. Deed provides interest on drawings @ 10%. The total interest charged was ₹ 1,000.
X x 10/100 x 6/12 = 1,000
⇒ X = ₹ 20,000
Interest on partner’s loan will be ______ to ______ account.
No interest is to be charged on drawings from the partners in case of ______.
Rent is provided even in case of loss or insufficient profits and is charged to profit and loss account.
Duty is to act within authority.
Current account can have credit balance in case of profits and other items of appropriation of profits. However, it can also have debit balance in case of over withdrawn amount or too many debit items being charged to it.
Ram, Raghav and Raghu are partners in a firm sharing profits in the ratio of 5 : 3 : 2. As per partnership deed, Raghu is to get a minimum amount of ₹ 10,000 as profit. Net profit for the year is ₹ 40,000. Calculate deficiency (if any) to Raghu.
Guaranteed Share of Raghu is = ₹ 10,000
Share in given Profit 40,000 x 2/10 = ₹ 8,000
∴ Deficiency in Rasrhu’s Share of Profit = 10,000 - 8,000 = ₹ 2,000
I f a partner withdraws equal am ount at end of each quarter, then _____ are to be considered for interest on total drawings.
Time Period = Time left after first drawings + Time left after last drawings / 2
= 9 + 0 / 2
= 4.5 months
Moin and Azam are partners in a firm with capital ₹ 20,000 and ₹ 40,000 respectively. Profit for FY 21 are ₹ 60,000 . Who will get how much share?
Profits will be divided equally i.e. ₹ 30,000 each.
Goodwill of Indian bears, a partnership firm, is ₹ 10,00,000 calculated on 2.5 years’ purchase of average profits of last 3 years.
What is value of X?
Goodwill = 25 x Average Profits
10,00,000 = 2.5 x Average Profits
Average Profits = ₹ 4,00,000
Also, Average Profits
= 7,00,000 + X + 3,00,000 / 3
Now, comparing (i) and (ii)
7,00,000 + X + 3,00,000 / 3 = 4,00,000
10,00,000 + X = 12,00,000
X = ₹ 2,00,000
Goodwill is purchased when it is acquired by business for consideration in cash or in kind. Goodwill is self-generated when it is emerged as a result of better quality of products and services of a firm over a continuous period of time.
Competency of management does not affect goodwill.
If management is capable, firm will get higher profits and then higher goodwill.
For valuation of goodwill, normal profit is calculated by ______ abnormal gains and ______ abnormal losses.
There is a need to value goodwill in all the cases given is the options. Goodwill valuation determines the goodwill adjustment to be made with respect to incoming/ outgoing/deceased partner.
Goodwill calculated by one method is equal to goodwill calculated by any other method.
Goodwill calculated by one method may differ from goodwill calculated by another method.
As per AS-26, self-generated goodwill is recorded in the books.
Self-generated goodwill is not recorded in the books because no consideration in money or money’s worth is paid for it.
Non-business incomes are added while calculating average profits.
Non-business incomes are deducted since average profits are calculated to determine the earning capacity of business in normal course of routine business operations.
Assertion(A): The factors which affect profits, also affect goodwill.
Reason(R): Profits are directly related to goodwill.
Read the following case study and answer question on the basis of the same.
Tony and Rony started a partnership firm, TR CDs to manufacture music CDs way back in 1990. Now since the music CDs are out of business, they plan to sell the business to one of the major content production houses in Mumbai. For the purpose of selling business, they reached to their accountant to calculate the goodwill and other financial advice. He suggested that since the CDs are very less in demand, their goodwill value will be hampered. Nonetheless, the framework for goodwill calculation was decided as follows
‘The goodwill be valued at 4 years’ purchase of super profits.’ The following financial information was obtained at the end of this transaction
Assets
- ₹ 8,000
- Creditors ₹ 1,000
- Normal rate of return 10%
- Goodwill of the firm ₹ 1,000
Goodwill = Super Profit x Number of Years’ Purchase
1,000 = Super Profit x 4 Super Profit = ₹250
Which of these ways lead to reconstitution of partnership firm?
In case of depreciation provided on plant and machinery (at the time of change in profit sharing ratio), which account is debited?
Machinery replacement fund is transferred to patners’ capital account at the time of change in profit sharing ratio.
Machinery replacement fund is not transferred because it is in the nature of accumulated depreciation and not in nature of accumulated profits.
If the claim on account of workmen’s compensation is more than the workmen compensation reserve, which account(s) is/are debited initially?
A and B are partners in a firm sharing profit and losses 2 : 3 with effect from 1st April, 2021, they decided to share profits and loss equally. What will be B’s gain/sacrifice?
B’s sacrifice/gain = Old ratio - New ratio
3/5 - 1/2 = 1/10
A, B and C are partners in a firm sharing profits in ratio of 2 : 1 : 3. They decided to share profits in ratio of 4:5:3. What was A’s gain/sacrifice?
A’s sacrifice/(gain) = Old ratio - New ratio
= 2/6 - 4/12 = 4 - 4/12
= 0/12
Revaluation account is prepared to _____ the assets and liabilities.
In case of increase in the amount of liability, revaluation account is _____ and liabilities account is ______
In case the claim on account of workmen’s compensation is equal to workmen compensation reserve, there is no treatment in revaluation account.
Existing goodwill is not supposed to be treated in case of change in profit sharing ratio.
Existing goodwill is divided in old ratio and debited in partners’ capital account.
The firm of A, B and C received a commission of ₹ 50,000 during 2020-21 with effect from 1st April, 2021, the partners decided to change the profit sharing ratio. It was decided that out of total commission received ₹ 10,000 to be treated as advance commission. What will be the initial effect on revaluation account on account of this transaction?
Advance commission will be credited because it is a liability for the firm and revaluation account will be debited by ₹ 10,000.
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