Admission of a Partner Quiz

Assertion (A): A new partner can be admitted into a partnership firm with the consent of all the existing partners.

Reason (R): According to Section 31 of the Indian Partnership Act, 1932, a new partner shall not be introduced into a firm without the consent of all the existing partners, unless it is agreed otherwise by the partners in the partnership deed.

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

Assertion (A): The treatment of revaluation of assets and reassessment of liabilities is done in same manner as done in case of change in profit sharing ratio.

Reason (R): Revaluation of assets and liabilities is only done when the new partner is admitted.

• Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

• Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is true, but Reason (R) is false.

• Assertion (A) is false, but Reason (R) is true.

• 20000

• 23750

• 25000

• 26250

Answer explanation

Explanation: 25,000 – 5% of 25,000 = 25,000 – 1,250 = 23,750

If the incoming partner is to bring Premium for Goodwill in cash and also a balance exists in Goodwill Account, then this Goodwill Account is written off among old partners in :

• New Profit Sharing Ratio

• Old Profit Sharing Ratio

• Sacrificing Ratio

• None of the above

Answer explanation

Explanation: The goodwill shown in the balance sheet is purchased goodwill and is w/off among the partners in the old profit sharing ratio.

Anita and Babita are partners sharing profits and losses as 3 : 2. Chandani is admitted and profit sharing ratio becomes 4 : 3 : 2. Goodwill is valued at ₹94,500. Chandani brings required goodwill in cash. Goodwill amount that will be credited by Chandani is:

• Anita ₹14,000 and Babita ₹7,000

• Anita ₹12,000 and Babita ₹9,000

• Anita ₹15,000

• Anita ₹21,000

Answer explanation

Explanation: Only Anita is the partner that is sacrificing her share and both Babita and Chandani are gaining, so they need to give the proportionate goodwill to Anita.