Partnership Accounting Quiz

When a new partner is admitted, the existing partners' share of profits will:

• Always increase

• Always decrease

• Remain the same

• Depend on the new profit-sharing ratio

The amount paid by the new partner for goodwill is credited to:

• Goodwill account

• New partner's capital account

• Existing partners' capital accounts

• Revaluation account

The sacrificing ratio is calculated as:

• New ratio - Old ratio

• Old ratio - New ratio

• New ratio + Old ratio

• Old ratio × New ratio

If a new partner pays ₹150,000 for 1/4 share in profits, the total value of goodwill is:

• ₹450,000

• ₹600,000

• ₹300,000

• ₹750,000

When goodwill is raised in books at the time of admission:

• Only new partner's account is debited

• All partners share in the credit including new partner

• Only old partners share in the credit

• Goodwill is directly written off

The sacrifice by existing partners should be:

• Equal to their capital ratios

• Equal to their old profit-sharing ratio

• Equal to the new partner's share

• Equal to their new profit-sharing ratio

Premium for goodwill paid privately by the new partner is:

• Recorded in the books of the firm

• Shared by all partners

• Not recorded in the books of the firm

• Debited to revaluation account

If old partners' ratio is 3:2 and new ratio is 2:2:1, the sacrificing ratio is:

• 1:2

• 2:1

• 3:2

• 2:3

The new profit-sharing ratio after admission is determined by:

• Only the new partner's share

• The amount of capital contributed

• The agreement among all partners

• The old ratio exclusively

When goodwill appears in the old balance sheet, it should be:

• Maintained at the same value

• Written off to all partners in new ratio

• Written off to old partners in old ratio

• Transferred to capital accounts