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B Com Exam  >  B Com Tests  >  Test: Accounting for Partnership Firm - 1 - B Com MCQ

Test: Accounting for Partnership Firm - 1 - B Com MCQ


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10 Questions MCQ Test - Test: Accounting for Partnership Firm - 1

Test: Accounting for Partnership Firm - 1 for B Com 2024 is part of B Com preparation. The Test: Accounting for Partnership Firm - 1 questions and answers have been prepared according to the B Com exam syllabus.The Test: Accounting for Partnership Firm - 1 MCQs are made for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Accounting for Partnership Firm - 1 below.
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Test: Accounting for Partnership Firm - 1 - Question 1
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What is the usual reason for admitting a new partner into an existing partnership firm?

Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 1
A new partner is usually admitted to bring in additional capital and managerial expertise, which can help in the growth and better management of the firm.
Test: Accounting for Partnership Firm - 1 - Question 2
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When a new partner is admitted, what must he usually bring in exchange for a share in the firm's future profits?

Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 2
The new partner must bring in his share of the firm's goodwill or premium, as he is acquiring a share in the future profits of the firm.
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Test: Accounting for Partnership Firm - 1 - Question 3
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What is the sacrificing ratio?

Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 3
The sacrificing ratio is the ratio in which the old partners forego their share of future profits in favor of the new partner, usually based on the old profit-sharing ratio unless specified otherwise.
Test: Accounting for Partnership Firm - 1 - Question 4
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Which of the following is NOT a factor affecting the value of goodwill?
Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 4
The number of employees is not directly a factor in determining the value of goodwill. Goodwill is affected by the nature of business, location, and efficiency of management.
Test: Accounting for Partnership Firm - 1 - Question 5
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How is the new profit-sharing ratio determined when a new partner is admitted?
Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 5
The new profit-sharing ratio is determined based on the agreement among the partners on how the new partner will acquire his share from the existing partners.
Test: Accounting for Partnership Firm - 1 - Question 6
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Which method is used to calculate goodwill by multiplying the average profits of past years?
Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 6
The Average Profits Method calculates goodwill by multiplying the average profits of past years by an agreed number of years’ purchase.
Test: Accounting for Partnership Firm - 1 - Question 7
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Which account is used to adjust the value of assets and liabilities at the time of the admission of a new partner?
Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 7
The Revaluation Account (or Profit and Loss Adjustment Account) is used to adjust the value of assets and liabilities to reflect their true value at the time of the admission of a new partner.
Test: Accounting for Partnership Firm - 1 - Question 8
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When assets are revalued, and their value increases, how is this accounted for?
Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 8
An increase in the value of assets is credited to the Revaluation Account, representing a gain to the firm.
Test: Accounting for Partnership Firm - 1 - Question 9
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In the context of a partnership firm, goodwill is best described as:
Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 9
Goodwill refers to the reputation or good name of a firm, which helps in retaining customers and earning profits above the normal expected returns.
Test: Accounting for Partnership Firm - 1 - Question 10
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What happens to the profit or loss from the revaluation of assets and liabilities?
Detailed Solution for Test: Accounting for Partnership Firm - 1 - Question 10
The profit or loss from the revaluation of assets and liabilities is transferred to the old partners' capital accounts in their old profit-sharing ratio to ensure fair adjustment before the new partner is admitted.
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