retirement of partner

1. Retiring partner is compensated for parting with the firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation amount in:

• Gaining Ratio

• Capital Ratio

• Sacrificing Ratio

• Profit Sharing Ratio

2.Gaining Ratio’ means :

• Old Ratio – New Ratio

• New Ratio – Old Ratio

• Old Ratio – Sacrificing Ratio

• New Ratio – Sacrificing Ratio

3. What treatment is made of accumulated profits and losses on the retirement of a partner?

• Credited to all partner’s capital accounts in old ratio.

• Debited to all partner’s capital accounts in old ratio.

• Credited to remaining partner’s capital accounts in new ratio.

• Credited to remaining partner’s capital accounts in gaining ratio.

4. At the time of retirement of a partner, profit on revaluation will be credited to :

• Capital Account of retiring partner

• Capital Accounts of all partners in the old profit sharing ratio.

• Capital Accounts of the remaining partners in their old profit sharing ratio

• Capital Accounts of the remaining partners in their new profit sharing ratio

5.At the time of retirement of a partner, calculation of new profit ratio is

• not necessary

• necessary

• optional

• None of the above

6.When the amount due to an outgoing partner is not paid immediately, then it is transferred to

• Capital A/c

• Loan A/c

• Cash A/c

• Revaluation A/c

7.If the amount due to the outgoing partner is transferred to loan account then he is entitled to interest at _____untill it is paid out.

• 9%

• 5%

• 6%

• 4%

8.If the goodwill account is raised for Rs.30,000, the amount is debited to

• The capital accounts of partners

• Goodwill Account

• Cash Account

• Revaluation Account

9.The accumulated reserves will be transferred to the old partners Capital account in the _______ ratio at the time of his retirement

• old profit sharing

• new profit sharing

• sacrificing

• gaining

10.A, B and C are sharing profits in the ratio of 2/5 : 2/5 : 1/5. C retired from business and his share was purchased equally by A and B. Then new profit sharing ratio shall be

• A – 1/2 & B – 1/2

• A – 3/5 & B – 2/5

• A – 2/5 & B – 3/5

• A-1/6 & B- 1/6