1. Dahi and Bhalle were partners in a firm sharing profits in the ratio of 3: 2.

They
admitted Papdi as a new partner. Goodwill of the firm was valued at 2,00,000.
Papdi brings her share of goodwill premium of 20,000 in cash, which is entirely
credited to Dahi’s Capital Account. New Profit sharing would be:
a. 3:2:1
b. 5:4:1
c. 1:1:1
d. None

2. P and Q are partners sharing profits and losses in the ratio of 2:1 with capitals
₹1,00,000 and ₹80,000 respectively. The interest on capital has been provided to
them @ 8% instead of 10%. In the rectifying adjustment entry, Q will be:
a. Debited by ₹400
b. Credited by ₹400
c. Debited by ₹400
d. Credited by ₹1600.

3. Assertion (A): Personal properties of a partner may also be used to pay off the
firm’s debts
Reason (R): All partners have limited liability in the firm.
a. Both (A) and (R) are true and (R) is the correct explanation of (A)
b. Both (A) and (R) are true and (R) is not the correct explanation of (A)
c. (A) is true, but (R) is false
d. (A) is false, but (R) is true

4. Ankur and Bobby were sharing profits and losses in the ratio 3 : 2. They admitted
Rohit for a 1/5 share in the firm. Rohit is guaranteed a minimum profit of ₹
2,00,000 for the year. Any deficiency in Rohit's share is to be borne by Ankur and
Bobby in the ratio 4 :1. Loss for the year was ₹ 10,00,000. Deficiency to be borne
by Ankur would be:
a. 1,60,000
b. 3,20,000
c. No profit will be given to Rohit
d. Rs. 40,000

5. Dosa and Sambhar are partners in the ratio of 3:2. Dosa is entitled to salary of Rs.
2,500 per quarter and Sambhar is entitled to commission of 10% of Net profit after
charging partners’ salary and commission. Net profit amounted to Rs. 2,30,000.
Total amount credited to Sambhar’s capital account would be:
a. 80,000
b. 1,00,000
c. 70,000
d. None
6. Which of the following items will be shown in Partner’s Capital A/c under Fixed
Capital method?
a. Drawings from profits
b. Drawings from capital
c. Interest on drawings
d. All of the above

7. X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1. They decided
to share future profits equally. The Profit and Loss Account showed a Credit
balance of Rs.30,000 and a General Reserve of Rs.60,000. If these are not to be
shown in balance sheet, in the journal entry:
a. Cr. X by Rs. 15,000; Dr. Z by Rs. 15,000
b. Dr. X by Rs. 15,000; Cr. Z by Rs. 15,000
c. Cr. X by Rs.45,000; Cr. 7 by Rs.30,000; Cr. Z by Rs. 15,000
d. Cr. X by Rs.30,000; Cr. 7 by Rs.30,000; Cr. Z by Rs.30,000

8. Extract of Balance sheet

Liabilities Amount Assets Amount
Debtors 4,00,000
Less: Provision for
Doubtful debts (20,000) 3,80,000

At the time of change in PSR, it was noticed that there are Bad debts of Rs. 25,000
and it was agreed that provision to be maintained @ 10% of Debtors. What is the
amount credited / debited in revaluation A/c?
a. Debit 37,500
b. Debit 42,500
c. Debit 65,000
d. Debit 62,500

9. A, B and C are partners in a firm. They admit D on 1st April, 2020, for 1/3 share in
the profits of the firm. D acquired his share as 1/12 from A and the remaining from
B and C in the ratio of 2:1. The sacrificing ratio of the old partners will be:
a. 1:1:2
b. 2:1:1
c. 1:2:1
d. 2:2:1
10. Mickey, Tom and Jerry were partners in the ratio of 5 : 3 : 2. On 31st March, 2021,
their books reflected a net profit of Rs. 2,00,000. As per the terms of the
partnership deed they were entitled for interest on capital which amounted to Rs.
80,000, Rs. 60,000 and Rs. 40,000 respectively.
Besides this a salary of Rs. 60,000 each was payable to Mickey and Tom. Calculate
the ratio in which the profits would be shared by the partners.

a. 1:1:1
b. 5:3:2
c. 7:6:2
d. 4:3:2

11. Adarsh & Vichaar are partners sharing profits in the ratio of 3:2. Their capitals
balances were Rs. 80,000 & Rs. 60,000. They admitted Sanskar as a partner who
brought Rs. 35,000 as his capital contribution. New profit-sharing ratio of partners
is to be 5:3:2. Capital accounts of old partners are to be adjusted as per the new
PSR. The Vichaar’s capital A/c will be
a. Debited by Rs. 7,500
b. Debited by Rs. 5,000
c. Credited by Rs. 7,500
d. Credited by Rs. 5,000

12. At the time of dissolution of a firm, Partners’ capital balances were Rs. 4,00,000,
creditors were Rs. 1,20,000. Cash & bank balance were Rs. 20,000. Realisation
expenses amounted to Rs. 10,000. Assets realised 20% more than the book value
and creditors were paid 5% less. Gain/loss on realisation will be
a. Gain of Rs. 96,000
b. Loss of Rs. 75,000
c. Gain of Rs. 4,95,000
d. Loss of Rs. 8,00,000

13. On dissolution of the firm, sundry assets were of Rs. 1,17,000. Mohan tool part of
sundry assets at Rs. 72,000 (being 10% less than the book value). Sohan took
remaining sundry assets at 80% of the book value. Realisation A/c is to be credited
with
a. Rs. 1,01,600
b. Rs. 1,08,000
c. Rs. 72,000
d. Rs. 84,000
14. Geet & Aditya are partners in a firm sharing profits & losses in the ratio of 3:2.
They admitted Anshuman as a partner for 1/5th share. The Journal entry passed
for Anshuman’s share of goodwill is:
Date Particulars Debit Credit
Premium for Goodwill A/c Dr. 3000
Anshuman’s Current A/c Dr. 2000
To Geet’s Capital A/c 2000
To Aditya’s Capital A/c 3000
New Profit-sharing Ratio will be:

a. 12:8:5
b. 2:2:1
c. 13:7:5
d. 9:6:4

15. Raman & Rohit are partners sharing profits & losses in the ratio of 3:2. They
admitted Tanya into partnership for 1/4th share. At the time of admission,
Investment fluctuation Reserve was Rs. 4,000 and Investments at Rs. 20,000
appears in the books. Following journal entry is passed to distribute ‘Investment
Fluctuation Reserve’:
Date Particulars Debit Credit
Investment Fluctuation Reserve Dr. 4,000
To Raman’s capital A/c 1,800
To Rohit ‘s capital A/c 1,200
To Investment A/c 1,000

Market value of Investments will be:

a. Rs. 16,000
b. Rs. 24,000
c. Rs. 18,000
d. Rs. 19,000

16. Creditors in Balance sheet before dissolution were Rs. 2,50,000. Half of the
creditors accepted furniture of Rs. 1,50,000 at 10% less than the book value and
cash of Rs. 10,000 in settlement of their claim. Remaining creditors were paid
availing discount of 5%.
What will be the amount with which bank account will be credited in the
realisation A/c for payment of creditors ?

a. Rs. 1,18,750
b. Rs. 1,35,000
c. Rs. 1,28,750
d. Rs. 1,25,000
17. At the time of dissolution of partnership firm, firm’s assets are applied first in
payment of:
a. Partners’ debt to outside parties
b. Partners’ advances
c. Partners’ capital
d. Firm’s debts due to outside parties

18. Chole, Bhature & Fitness are partners sharing profits in the ratio of 3:2:1. On 1st
July, 2022, Fitness died and Chole & Bhature decided to share profits equally. The
partners directed the accountant to prepare the financial statements and the
accordingly the share of Fitness’s profit was calculated as Rs. 25,000. Which
account will be debited at the time of profit distribution?
a. Profit & loss suspense A/c
b. Profit & loss A/c
c. Profit & loss appropriation A/c
d. Fitness’s Capital A/c

19. Consistency, Dedication & Tension were partners in a firm sharing profits and
losses in the ratio of 8:7:5. On 1st November, 2022, Tension died and his/her share
of profit till date of death was calculated at Rs. 9,375. New profit sharing is 2:3
Which account will be debited at the time of profit sharing?
a. Profit & Loss Suspense A/c
b. Tension’s capital A/c
c. Consistency’s Capital A/c
d. Dedication’s Capital A/c

20. A firm is dissolved, Mohan, a partner is to carry out dissolution. Rs. 50,000 is fixed
as his remuneration. Realisation expenses were Rs. 25,000, which were paid by
Mohan. Mohan’s capital A/c will be credited by
a. Rs. 50,000
b. Rs. 35,000
c. Rs. 25,000
d. Rs. 75,000

21. On Dissolution, Goodwill account appearing in the Balance sheet is transferred to

a. Capital A/c of the partners
b. Credit of Cash A/c
c. Debit of Realisation A/c
d. Credit of Realisation A/c
 22. Assertion(A): At the time of death of a partner, the combined profit share of the
remaining partners increases.
Reason(R): Remaining or continuing partners take a part of profit share of the
deceased partner. As a result, their individual profit share increases.
a. Both (A) and (R) are true and (R) is the correct explanation of (A)
b. Both (A) and (R) are true and (R) is not the correct explanation of (A)
c. (A) is true, but (R) is false
d. (A) is false, but (R) is true

23. A, B and C were partners sharing profits & losses in the ratio of 3:2:1. B died on
30th June, 2022. Profit share of deceased partner from the beginning of the
financial year was to be estimated based on sales up to the date of death and profit
of the previous year. Net profit earned in the previous year was 20% of the sales.
Sales of the previous year was Rs. 10,00,000. It is estimated that sales will show
20% growth in the current year & profit % will increase by 5%. The profit share
of B will be:
a. Rs. 25,000
b. Rs. 50,000
c. Rs. 60,000
d. Rs. 20,000

24. Life, School & Exams are partners sharing profits & Losses in the ratio of 2:1:1.
School retires and given her share of profit to Life & Exams for Rs. 3,600 & Rs.
3,000. The New Profit-sharing ratio of Life & Exams will be:
a. 6:5
b. 2:1
c. 7:4
d. 5:2

25. Amount credited to a retiring partner in a capital account is Rs. 2,01,000. He took
investments at Rs. 58,000. He also took 20% of the debtors. The amount
transferred to his loan A/c is Rs. 1,23,000. What is the value of the debtors?
a. Rs. 1,00,000
b. Rs. 90,000
c. Rs. 80,000
d. Rs. 1,10,000

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