Partnership accounts MCQs
Which one of the following double entries is correct regarding the cost of firm or partnership dissolution?
A) Credit realization a/c and Debit partners capital a/c WRONG ANSWER
B) Credit realization a/c and Debit bank a/c WRONG ANSWER
C) Debit realization a/c and Credit bank/cash RIGHT ANSWER!!!
Identify the correct double entry for realization profit at time dissolution of partnership
A) Debit realization a/c and Credit bank a/c WRONG ANSWER
B) Debit bank a/c and Credit realization account WRONG ANSWER
C) Debit realization account and Credit partners’ capital accounts RIGHT ANSWER!!!
Partner ‘A’ took firm’s vehicle worth $5000 without payment at the time of firm’s disbanding. Identify the correct adjustment in the capital account of partner ‘A’
A) $5000 will be debitedRIGHT ANSWER!!!
B) $5000 will be creditedWRONG ANSWER
C) No adjusted needed in capital a/c WRONG ANSWER
During the process of dissolution of partnership, the carrying value of machinery=$5000 and building = $20,000 while both fixed assets were disposed at the cumulative price of $10,000 and realization cost was up to $2000. Identify what total amount needed to credit or debit in the partners capital accounts
A) $12000 Debit WRONG ANSWER
B) $13000 Credit WRONG ANSWER
C) $13000 DebitRIGHT ANSWER!!!
C) $10,000 DebitWRONG ANSWER
A and B are the partners in a small firm, their profit or loss sharing ratio is 6:4. A new partner C admitted in the firm that will share profit or loss at the ratio of 1/4. Which of the following is the new profit or loss sharing ratio among the partners A, B and C
A) 6:4:1WRONG ANSWER
B) 18:12:10RIGHT ANSWER!!!
C) 10:12:18 WRONG ANSWER
D) 6:4:4WRONG ANSWER
Which one of the following is the method of goodwill valuation?
A) Average capital method WRONG ANSWER
B) Super capital method WRONG ANSWER
C) Capital intensity method WRONG ANSWER
D) Super profit methodRIGHT ANSWER!!!
Under capitalization method of goodwill valuation, which of the following formulas is used to calculate the “value of whole business”?
A) Value of whole business=Profit / Reasonable rate of return X 100 RIGHT ANSWER!!!
B) Value of whole business= Total assets / Reasonable rate of return X 100 WRONG ANSWER
C) Value of whole business= Equity-Net assetsWRONG ANSWER
Which of the following is not recorded in the partners current accounts?
A) DrawingsRIGHT ANSWER!!!
B) Interest on DrawingsWRONG ANSWER
C) Partners salariesWRONG ANSWER
D) Administrative expensesRIGHT ANSWER!!!
A partner that doesn’t take part in the management of business, but he/she has made investment in business and liable to creditors of the business is known as:
A) Active partnerWRONG ANSWER
B) Nominal partnerWRONG ANSWER
C) Junior partnerWRONG ANSWER
D) Dormant partnerRIGHT ANSWER!!!