Quiz about GENERAL QA IN GENERAL AWARENESS

Question 1

Assertion (A) At the time of admission the gain or loss on revaluation is transferred to all partner’s capital account in their new profit-sharingReason (R) All partners have the right to share the assets and liabilities of the partnership firm. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true

Accepted Answer

NA

Question 2

Assertion (A) The revaluation account is prepared for the purpose of transferring the profit or loss arising out of increase or decrease in the book value of assets or liabilities of the partnership at the time of admission of a new partner.Reason (R) At the time of admission of a new partner it is always desirable to ascertain whether the assets of a firm are shown in books at their current values. In case the assets are overstated or understated these are revaluated.a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true

Accepted Answer

NA

Question 3

Assertion (A) At the time of admission the gain or loss on revaluation is transferred to all partner’s capital account in their new profit-sharing Reason (R) All partners have the right to share the assets and liabilities of the partnership firm. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.

Accepted Answer

NA

Question 4

Assertion (A) The revaluation account is prepared for the purpose of transferring the profit or loss arising out of increase or decrease in the book value of assets or liabilities of the partnership at the time of admission of a new partner. Reason (R) At the time of admission of a new partner it is always desirable to ascertain whether the assets of a firm are shown in books at their current values. In case the assets are overstated or understated these are revaluated.a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.

Accepted Answer

NA

Question 5

Assertion (A) Unrecorded assets are credited to revaluation account.Reason (R) Increase in value of asset is gain. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct

Accepted Answer

NA

Question 6

What is the full form of ‘LIFO’ while dealing with inventory?

Accepted Answer

NA

Question 7

Name the book which is used for classification of data in accounting?

Accepted Answer

NA

Question 8

Assertion (A) At the time of admission of a new partner he is required to bring premium or goodwill. Reason (R)  Due to admission of a new partner the existing partner’s sacrifice their share of profits in favour of new partner. So he has to compensate the existing partners for loss of their share in super profits of the firm. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.

Accepted Answer

NA

Question 9

Mr. Damodar has confusion about the basic accounting assumptions. Can you help him to solve his confusion?orBasic accounting assumption provides a foundation for the accounting process. Explain the Various accounting assumptions.

Accepted Answer

NA

Question 10

Assertion (A) At the time of admission of a new partner advertisement suspense account is transferred to old partner’s capital account in their old profit-sharing ratio Reason(R) Advertisement suspense account is a part of accumulated losses therefore like any other losses it should be transferred to old partners’ capital account. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.

Accepted Answer

NA

Question 11

Assertion (A) Investments are recorded in the books of the firm at cost.Reason (R) Market value of investment may be equal to or lower or higher than its book value.a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.

Accepted Answer

NA

Question 12

Assertion (A) Advertisement suspense existing in Assets side of Balance Sheet should be debited to partners’ capital ac. Reason (R) Advertisement suspense ac is Accumulated profit. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.

Accepted Answer

NA

Question 13

Assertion (A) At the time of admission of a new partner general reserve appearing in the old balance sheet is transferred to all partner’s capital account. Reason(R) The new partner is not entitled to have any share in general reserve (accumulated profits). These are transferred to old partner’s capital accounts in old profit-sharing ratio.a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true

Accepted Answer

NA

Question 14

Assertion (A) At the time of admission of a new partner general reserve appearing in the old balance sheet is transferred to all partner’s capital account. Reason(R) The new partner is not entitled to have any share in general reserve (accumulated profits). These are transferred to old partner’s capital accounts in old profit-sharing ratio.a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.

Accepted Answer

NA

Question 15

Match the following-1.Accumulated profitsa.means change in value of assets ie. present value being different from that of book value.2.reserveb. means amount set aside out of profits to meet a contingency or to strengthen the financial position of the firm.3.Revalualtion of assetsc. means re assessing the liabilities ie. whether the liability is more or less than that shown in the books of accounts4.Re assessment of liabilitiesd. means profits of the firm that have not been distributed among the partners.a. 1.d;2.b;3.a;4.c b. 1.a;2.c;3.d;4.b c. 1.b;2.d;3.a;4.cd. 1.c;2.a;3.b;4.d

Accepted Answer

NA

Question 16

At the time of admission of a new partner general reserve appearing in the old balance sheet is transferred to (a) All partner capital accounts (b) New partner’s capital Ac (c) Old partners capital Ac (d) None of the above

Accepted Answer

NA

Question 17

Assertion (A) At the time of admission of a new partner advertisement suspense account is transferred to old partner’s capital account in their old profit-sharing ratio Reason(R) Advertisement suspense account is a part of accumulated losses therefore like any other losses it should be transferred to old partners’ capital account. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.

Accepted Answer

NA

Question 18

A new partner can be admitted only when a) Majority decision b) Consent of managing partner c) Approval of Registrar of firm d) Existing partners unanimously agree for it

Accepted Answer

NA

Question 19

Share of goodwill brought by new partner in cash is shared by old partners in -(A) Sacrificing Ratio (B) Old Ratio (C) New Ratio (D) Equally

Accepted Answer

NA

Question 20

Assertion (A) Investments are recorded in the books of the firm at cost.Reason (R) Market value of investment may be equal to or lower or higher than its book value. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.

Accepted Answer

NA

Question 21

Match the following-A. 1.d;2.b;3.a;4.c B. 1.a;2.c;3.d;4.b C. 1.b;2.d;3.a;4.cD. 1.c;2.a;3.b;4.d

Accepted Answer

NA

Question 22

Assertion (A) Reserves cannot appear at the same amount in the Balance Sheet of the reconstituted firm. Reason (R) Reserves are to be distributed among partners in their old ratio. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.

Accepted Answer

NA

Question 23

Assertion (A) Reserves cannot appear at the same amount in the Balance Sheet of the reconstituted firm.Reason (R) Reserves are to be distributed among partners in their old ratio. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.

Accepted Answer

NA

Question 24

A new partner can be admitted only when a) Majority decision b) Consent of managing partner c) Approval of Registrar of firm d) Existing partners unanimously agree for it

Accepted Answer

NA

Question 25

Match the following for situations at the time of admission of new partners.Column I (ItemsTransaction)Column II (distribution)i) Sacrificing RatioA. Nominal accountii) Gaining RatioB. Reconstitution of Partnershipiii)Revaluation AccountC. New Ratio – Old Ratioiv)Admission of PartnerD. Old Ratio – New Ratioa) i-B ii-C iii-A iv-D b) i-D ii-B iii-A iv-C c) i-D ii-C iii-A iv-B d) i-D ii-C iii-B iv-A

Accepted Answer

NA

Question 26

Match the columns for situations at the time of admission of new partners.Column I (ItemsTransaction)Column II (distribution)A. Future Profits(i) Old ratioB. General reserve(ii) New ratioC. Employee provident fund(iii) Sacrificing ratioD. Good will of incoming partner(iv) Not distributeda. (i) (ii) (iii) (iv) b. (i) (ii) (iv) (iii) c. (ii) (i) (iv) (iii) d. (ii) (i) (iii) (iv)

Accepted Answer

NA

Question 27

Match the columns (at the time of admission of partners situations)Column I (ItemsTransaction)Column II (Entry)A.Increase in Liabilities(i) Credit – Revaluation AccountB. Bad Debts recovered(ii) Credit – Partner’s Capital AccountC. Accumulated losses(iii) Debit – Revaluation AccountD. Profit and loss ( Cr)(iv) Debit – Partners’ Capital Account(a) (iii) (i) (ii) (iv) (b) (i) (iii) (iv) (ii) (c) (i) (iii) (ii) (iv) (d) (iii) (i) (iv) (ii)

Accepted Answer

NA

Question 28

Which of the following is transferred to realisation account.(a)  Balance of cash AC(b)  Balance of profit and loss AC(c) Amount realised on sale of assets(d)  Reserve

Accepted Answer

NA

Question 29

A B and C are partner with profit sharing ratio an 532  A retires. Find the gaining ratio.(a) 32(b) 53 (c) 52(d) 22

Accepted Answer

NA

Question 30

1. The goodwill of a firm is to be worked out at three years’ purchase of the average profits of the last five years which are as follows `(YearProfits(Loss)(Rs))(201210000)(201315000)(20144000)(2015(5000))(20166000)` 2. The capital employed of the firm is Rs. 100000 and normal rate of return is 8% the average profits for last 5 years are Rs. 12000 and goodwill is to be worked out at 3 years’ purchase of super profits 3. Rama Brothers earn an average profit of Rs. 30000 with a capital of Rs. 200000. The normal rate of return in the business is 10%. Using capitalisation of super profits method work out the value the goodwill of the firm.

Accepted Answer

NA

Question 31

Match the following items a)Goodwill appearing in the books at the time of admissioni)New partner’s Capital Ac Dr.To Sacrificing Partners’ capital Acb)When new partner brings hisher share of goodwill in cashii)No entry passed in the books of accountsc)When new partner is unable to bring hisher share of goodwill in cashiii)Premium for goodwill Ac Dr.To sacrificing partners’ capital Acd)When new partner brings hisher share of goodwill in cash and paid privatelyiv)Written off in old profit sharing ratioa) a- iii) b- i) c- ii) d – iv) b) a- iv) b – iii) c – i) d – ii) c) a – iv ) b – iii) c – ii) d – i) d) a – ii) b – iv) c – i) d – iii)

Accepted Answer

NA

Question 32

What will be the value of goodwill at two the average of last three years profit years were Rs. 4000 Rs. 5000 and Rs. 6000.(a) Rs. 5000(b) Rs. 10000(c) Rs. 8000(d) Rs. 15000

Accepted Answer

NA

Question 33

Match the following items a)Revaluation Aci)Personal Acb)Partners’ Capital Acii)Real Acc)Goodwilliii)Revaluation Acd)Profit and loss adjustment Aciv)Nominal Aca) a-ii) b- iv) c - i) d – iii) b) a- iv) b – iii) c – i) d – i) c) a – iv) b – i) c – ii) d – iii) d) a- iii) b – i) c – iv) d – ii)

Accepted Answer

NA

Question 34

Match the following items a) a- iii) b- i) c- ii) d – iv) b) a- iv) b – iii) c – i) d – ii) c) a – iv ) b – iii) c – ii) d – i) d) a – ii) b – iv) c – i) d – iii)

Accepted Answer

NA

Question 35

Which of the following are not the characteristics of an ideal message? a) Clear b) Concise c) Accurate d) Illusionary

Accepted Answer

NA

Question 36

The excess of actual profit over the normal profit is called.(a)  Super profit(b)  Fixed profit(c)  Net profit(d)  None of these

Accepted Answer

NA

Question 37

Match the following items at the time of admissioni)Increase in value of machinerya)Dr. to Partners’ capital Acii)Unrecorded outstanding repair billb)Cr. To partners ‘capital Aciii)General reservec)Dr. to Revaluation Aciv)Profit and Loss Ac(Dr)d)Cr. To Revaluation Aca) i)- c ii)- a iii) – b iv) –d b) i) – d ii) – c iii) – a iv) – b c) i) – d ii)- c iii) – b iv) – a d) i) – b ii) – d iii) a iv)- c

Accepted Answer

NA

Question 38

Goodwill means(a)  Famous name(b)  Famous product(c)  Good reputation of business(d)  None of these

Accepted Answer

NA

Question 39

Match the following items a) a-ii) b- iv) c - i) d – iii) b) a- iv) b – iii) c – i) d – i) c) a – iv) b – i) c – ii) d – iii) d) a- iii) b – i) c – iv) d – ii)

Accepted Answer

NA

Question 40

Arrange in correct sequence the treatment of admission of a partner. i) Preparation of partners’ capital Ac ii) Calculation of sacrificing ratio iii) Adjustment of goodwill iv) preparation of revaluation Ac a) iii I ii iv b) ii iii iv i c) I ii iv iii

Accepted Answer

NA

Question 41

Arrange in correct sequence the treatment of admission of a partner.i) Preparation of partners’ capital Ac ii) Calculation of sacrificing ratio iii) Adjustment of goodwill iv) preparation of revaluation Ac a) iii I ii iv b) ii iii iv i c) I ii iv iii

Accepted Answer

NA

Question 42

ASSERTION (A) Whenever new partner brings Goodwill in cash he should bring the amount of Goodwill only for his share . REASON (R ) It is common rule that the gaining partner should compensate the sacrificing partner to extent of his gain. (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) (b) Both Assertion (A) and the reason (R) are true but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true but Reason ( R) is false (d) Assertion (A) is false but Reason (R) is True

Accepted Answer

NA

Question 43

A and B share profits in the proportions of 34 and 14. Their Balance Sheet on Dec. 31 2016 was as follows  On Jan. 1 2017 C was admitted into partnership on the following terms (a) That C pays Rs. 10000 as his capital. (b) That C pays Rs. 5000 for goodwill. Half of this sum is to be withdrawn by A and B. (c) That stock and fixtures be reduced by 10% and a 5% provision for doubtful debts be created on Sundry Debtors and Bills Receivable. (d) That the value of land and buildings be appreciated by 20%. (e) There being a claim against the firm for damages a liability to the extent of Rs. 1000 should be created. (f) An item of Rs. 650 included in sundry creditors is not likely to be claimed and hence should be written back. Record the above transactions (journal entries) in the books of the firm assuming that the profit sharing ratio between A and B has not changed. Prepare the new Balance Sheet on the admission of C.

Accepted Answer

NA

Question 44

ASSERTION (A) Profit or loss on revalution of assets and reassessment of liabilities is transferred to the old partners’ Capital accountCurrent account in old profit sharing ratio. REASON (R) All the accumulated profits or losses and reserves are transferred to old partners’ capital accountcurrent account in the old profit sharing ratio (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) (b) Both Assertion (A) and the reason (R) are true but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true but Reason ( R) is false (d) Assertion (A) is false but Reason (R) is True

Accepted Answer

NA

Question 45

ASSERTION (A) The treatment of revaluation of assets and reassessment of liabilities is done in the same manner as done in case of change in profit sharing ratio.REASON (R) Revaluation of assets and liabilities is only done when new partner is admitted.(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) (b) Both Assertion (A) and the reason (R) are true but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true but Reason ( R) is false (d) Assertion (A) is false but Reason (R) is True

Accepted Answer

NA

Question 46

At the time of admission profit on revaluation of assets and reassessment of liabilities is transferred to a) Capital Ac of all partners b) Capital Ac of old partners c) Capital Ac of new partners d) Liability side of balance sheet

Accepted Answer

NA

Question 47

ASSERTION (A) Profit or loss on revalution of assets and reassessment of liabilities is transferred to the old partners’ Capital accountCurrent account in old profit sharing ratio.REASON (R) All the accumulated profits or losses and reserves are transferred to old partners’ capital accountcurrent account in the old profit sharing ratio (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) (b) Both Assertion (A) and the reason (R) are true but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true but Reason ( R) is false (d) Assertion (A) is false but Reason (R) is True

Accepted Answer

NA

Question 48

ASSERTION (A ) A new partner can be admitted into a partnership firm with consent of the existing partners. REASON (R) According to section 31 of the Indian Partnership Act 1932 new partner shall not be introduced into firm without consent of all the existing partners. Unless it is agreed otherwise by the partners and partnership deed.(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) (b) Both Assertion (A) and the reason (R) are true but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true but Reason ( R) is false (d) Assertion (A) is false but Reason (R) is True

Accepted Answer

NA

Question 49

ASSERTION (A) The treatment of revaluation of assets and reassessment of liabilities is done in the same manner as done in case of change in profit sharing ratio. REASON (R) Revaluation of assets and liabilities is only done when new partner is admitted. (a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A) (b) Both Assertion (A) and the reason (R) are true but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true but Reason ( R) is false (d) Assertion (A) is false but Reason (R) is True

Accepted Answer

NA

Question 50

ASSERTION (A) it is right of the new partner on the firm’s Assets and LabilitiesREASON (R ) Old partners of the firm sacrifice some profit according to the new profit sharing ratio in favour of incoming partner.(a) Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)(b) Both Assertion (A) and the reason (R) are true but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true but Reason ( R) is false (d) Assertion (A) is false but Reason (R) is True

Accepted Answer

NA

Explore topic-wise InterviewSolutions in Current Affairs.

What is the full form of ‘LIFO’ while dealing with inventory?

Name the book which is used for classification of data in accounting?

Mr. Damodar has confusion about the basic accounting assumptions. Can you help him to solve his confusion?orBasic accounting assumption provides a foundation for the accounting process. Explain the Various accounting assumptions.

At the time of admission of a new partner, general reserve appearing in the old balance sheet is transferred to: (a) All partner capital accounts (b) New partner’s capital A/c (c) Old partners capital A/c (d) None of the above

A new partner can be admitted only when: a) Majority decision b) Consent of managing partner c) Approval of Registrar of firm d) Existing partners unanimously agree for it

Share of goodwill brought by new partner in cash is shared by old partners in -(A) Sacrificing Ratio (B) Old Ratio (C) New Ratio (D) Equally

Match the following:-A. 1.d;2.b;3.a;4.c B. 1.a;2.c;3.d;4.b C. 1.b;2.d;3.a;4.cD. 1.c;2.a;3.b;4.d

A new partner can be admitted only when: a) Majority decision b) Consent of managing partner c) Approval of Registrar of firm d) Existing partners unanimously agree for it

Which of the following is transferred to realisation account.(a) Balance of cash A/C(b) Balance of profit and loss A/C(c) Amount realised on sale of assets(d) Reserve

A, B and C are partner with profit sharing ratio an 5:3:2, A retires. Find the gaining ratio.(a) 3:2(b) 5:3 (c) 5:2(d) 2:2

What will be the value of goodwill at two the average of last three years profit years were Rs. 4,000, Rs. 5,000 and Rs. 6,000.(a) Rs. 5,000(b) Rs. 10,000(c) Rs. 8,000(d) Rs. 15,000

Match the following items :a) a- iii) b- i) c- ii) d – iv) b) a- iv) b – iii) c – i) d – ii) c) a – iv ) b – iii) c – ii) d – i) d) a – ii) b – iv) c – i) d – iii)

Which of the following are not the characteristics of an ideal message? a) Clear b) Concise c) Accurate d) Illusionary

The excess of actual profit over the normal profit is called.(a) Super profit(b) Fixed profit(c) Net profit(d) None of these

Goodwill means(a) Famous name(b) Famous product(c) Good reputation of business(d) None of these

Match the following items :a) a-ii) b- iv) c - i) d – iii) b) a- iv) b – iii) c – i) d – i) c) a – iv) b – i) c – ii) d – iii) d) a- iii) b – i) c – iv) d – ii)

Arrange in correct sequence the treatment of admission of a partner. i) Preparation of partners’ capital A/c ii) Calculation of sacrificing ratio iii) Adjustment of goodwill iv) preparation of revaluation A/c a) iii , I , ii , iv b) ii , iii , iv , i c) I , ii, iv, iii

Arrange in correct sequence the treatment of admission of a partner.i) Preparation of partners’ capital A/c ii) Calculation of sacrificing ratio iii) Adjustment of goodwill iv) preparation of revaluation A/c a) iii , I , ii , iv b) ii , iii , iv , i c) I , ii, iv, iii

At the time of admission profit on revaluation of assets and reassessment of liabilities is transferred to: a) Capital A/c of all partners b) Capital A/c of old partners c) Capital A/c of new partners d) Liability side of balance sheet

1.	Assertion (A): At the time of admission, the gain or loss on revaluation is transferred to all partner’s capital account in their new profit-sharingReason (R): All partners have the right to share the assets and liabilities of the partnership firm. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true
Answer» Correct option is b) Both Assertion (A) and Reason (R) are false

2.	Assertion (A): The revaluation account is prepared for the purpose of transferring the profit or loss arising out of increase or decrease in the book value of assets or liabilities of the partnership at the time of admission of a new partner.Reason (R): At the time of admission of a new partner, it is always desirable to ascertain whether the assets of a firm are shown in books at their current values. In case the assets are overstated or understated, these are revaluated.a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true
Answer» Correct option is d) Assertion (A) is false and Reason (R) is true.

3.	Assertion (A): At the time of admission, the gain or loss on revaluation is transferred to all partner’s capital account in their new profit-sharing Reason (R): All partners have the right to share the assets and liabilities of the partnership firm. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.
Answer» b) Both Assertion (A) and Reason (R) are false.

4.	Assertion (A): The revaluation account is prepared for the purpose of transferring the profit or loss arising out of increase or decrease in the book value of assets or liabilities of the partnership at the time of admission of a new partner. Reason (R): At the time of admission of a new partner, it is always desirable to ascertain whether the assets of a firm are shown in books at their current values. In case the assets are overstated or understated, these are revaluated.a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.
Answer» d) Assertion (A) is false and Reason (R) is true.

5.	Assertion (A): Unrecorded assets are credited to revaluation account.Reason (R): Increase in value of asset is gain. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct
Answer» Correct option is a. Both A and R are correct and R is the correct explanation of A

6.	What is the full form of ‘LIFO’ while dealing with inventory?
Answer» Last In First Out.

7.	Name the book which is used for classification of data in accounting?
Answer» Ledger Book.

8.	Assertion (A) : At the time of admission of a new partner he is required to bring premium or goodwill. Reason (R) : Due to admission of a new partner , the existing partner’s sacrifice their share of profits in favour of new partner. So, he has to compensate the existing partners for loss of their share in super profits of the firm. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.
Answer» c) Assertion (A) is true and Reason (R) is false.

10.	Assertion (A): At the time of admission of a new partner, advertisement suspense account is transferred to old partner’s capital account in their old profit-sharing ratio Reason(R): Advertisement suspense account is a part of accumulated losses therefore like any other losses it should be transferred to old partners’ capital account. a) Both Assertion (A) and Reason (R) are true. b) Both Assertion (A) and Reason (R) are false. c) Assertion (A) is true and Reason (R) is false. d) Assertion (A) is false and Reason (R) is true.
Answer» Correct option is b) Both Assertion (A) and Reason (R) are false.

11.	Assertion (A): Investments are recorded in the books of the firm at cost.Reason (R): Market value of investment may be equal to or lower or higher than its book value.a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.
Answer» Correct option is b. Both A and R are correct but R is not the correct explanation of A.

12.	Assertion (A): Advertisement suspense existing in Assets side of Balance Sheet should be debited to partners’ capital a/c. Reason (R): Advertisement suspense a/c is Accumulated profit. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.
Answer» c. A is correct but R is wrong

15.	Match the following:-1.Accumulated profitsa.means change in value of assets, ie., present value being different from that of book value.2.reserveb. means amount set aside out of profits to meet a contingency or to strengthen the financial position of the firm.3.Revalualtion of assetsc. means re assessing the liabilities ie., whether the liability is more or less than that shown in the books of accounts4.Re assessment of liabilitiesd. means profits of the firm that have not been distributed among the partners.a. 1.d;2.b;3.a;4.c b. 1.a;2.c;3.d;4.b c. 1.b;2.d;3.a;4.cd. 1.c;2.a;3.b;4.d
Answer» a. 1.d;2.b;3.a;4.c

16.	At the time of admission of a new partner, general reserve appearing in the old balance sheet is transferred to: (a) All partner capital accounts (b) New partner’s capital A/c (c) Old partners capital A/c (d) None of the above
Answer» (c) Old partners capital A/c

18.	A new partner can be admitted only when: a) Majority decision b) Consent of managing partner c) Approval of Registrar of firm d) Existing partners unanimously agree for it
Answer» d) Existing partners unanimously agree for it

19.	Share of goodwill brought by new partner in cash is shared by old partners in -(A) Sacrificing Ratio (B) Old Ratio (C) New Ratio (D) Equally
Answer» Correct option is: (A) Sacrificing Ratio

20.	Assertion (A): Investments are recorded in the books of the firm at cost.Reason (R): Market value of investment may be equal to or lower or higher than its book value. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.
Answer» b. Both A and R are correct but R is not the correct explanation of A.

22.	Assertion (A): Reserves cannot appear at the same amount in the Balance Sheet of the reconstituted firm. Reason (R): Reserves are to be distributed among partners in their old ratio. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.
Answer» d. A is wrong but R is correct.

23.	Assertion (A): Reserves cannot appear at the same amount in the Balance Sheet of the reconstituted firm.Reason (R): Reserves are to be distributed among partners in their old ratio. a. Both A and R are correct and R is the correct explanation of A. b. Both A and R are correct but R is not the correct explanation of A. c. A is correct but R is wrong d. A is wrong but R is correct.
Answer» Correct option is d. A is wrong but R is correct.

24.	A new partner can be admitted only when: a) Majority decision b) Consent of managing partner c) Approval of Registrar of firm d) Existing partners unanimously agree for it
Answer» Correct option is d) Existing partners unanimously agree for it

25.	Match the following: for situations at the time of admission of new partners.Column I (Items/Transaction)Column II (distribution)i) Sacrificing RatioA. Nominal accountii) Gaining RatioB. Reconstitution of Partnershipiii)Revaluation AccountC. New Ratio – Old Ratioiv)Admission of PartnerD. Old Ratio – New Ratioa) i-B, ii-C, iii-A, iv-D b) i-D, ii-B iii-A, iv-C c) i-D, ii-C, iii-A, iv-B d) i-D, ii-C, iii-B, iv-A
Answer» c) i-D, ii-C, iii-A, iv-B

26.	Match the columns for situations at the time of admission of new partners.Column I (Items/Transaction)Column II (distribution)A. Future Profits(i) Old ratioB. General reserve(ii) New ratioC. Employee provident fund(iii) Sacrificing ratioD. Good will of incoming partner(iv) Not distributeda. (i) (ii) (iii) (iv) b. (i) (ii) (iv) (iii) c. (ii) (i) (iv) (iii) d. (ii) (i) (iii) (iv)
Answer» c. (ii) (i) (iv) (iii)

27.	Match the columns (at the time of admission of partners situations)Column I (Items/Transaction)Column II (Entry)A.Increase in Liabilities(i) Credit – Revaluation AccountB. Bad Debts recovered(ii) Credit – Partner’s Capital AccountC. Accumulated losses(iii) Debit – Revaluation AccountD. Profit and loss ( Cr)(iv) Debit – Partners’ Capital Account(a) (iii) (i) (ii) (iv) (b) (i) (iii) (iv) (ii) (c) (i) (iii) (ii) (iv) (d) (iii) (i) (iv) (ii)
Answer» (d) (iii) (i) (iv) (ii)

28.	Which of the following is transferred to realisation account.(a) Balance of cash A/C(b) Balance of profit and loss A/C(c) Amount realised on sale of assets(d) Reserve
Answer» Amount realised on sale of assets is transferred to realisation account.

29.	A, B and C are partner with profit sharing ratio an 5:3:2, A retires. Find the gaining ratio.(a) 3:2(b) 5:3 (c) 5:2(d) 2:2
Answer» A, B and C are partner with profit sharing ratio an 5:3:2 a retires , and the gaining ratio is 5:2.

30.	1. The goodwill of a firm is to be worked out at three years’ purchase of the average profits of the last five years which are as follows: `{:(Year,Profits(Loss)(Rs)),(2012,10000),(2013,15000),(2014,4000),(2015,(5000)),(2016,6000):}` 2. The capital employed of the firm is Rs. 1,00,000 and normal rate of return is 8%, the average profits for last 5 years are Rs. 12,000 and goodwill is to be worked out at 3 years’ purchase of super profits, 3. Rama Brothers earn an average profit of Rs. 30,000 with a capital of Rs. 2,00,000. The normal rate of return in the business is 10%. Using capitalisation of super profits method work out the value the goodwill of the firm.
Answer» 1. Total Profit = Rs. `10,000 +Rs. 15,000+ Rs. 4,000+ Rs. 6,000 - Rs. 5,000 = Rs. 30,000` Average Profits = Rs, `30.000//5 = Rs. 6,000` Goodwill = Average Profits `xx 3= Rs. 6,000 xx 3 = Rs. 18,000` 2. Average Profit = Rs. 12,000 Normal Profit = Rs. `1,00,000 xx (8)/(100) = Rs. 8,000` Super Profit = Average Profit - Normal profit = Rs. `12,000 - Rs. 8,000` = Rs. 4,000 Goodwill=Super Profit `xx3 = Rs. 4,000 xx 3 = Rs. 12,000` Super Profit = Average Profit - Normal Profit = Rs, `30.000 - Rs, 20,000 = Rs. 10,000` Goodwill = Super Profit `xx 100`/Normal Rate of Return `= 10.000 xx 100//10 = Rs. 1,00,000`.

31.	Match the following items :a)Goodwill appearing in the books at the time of admissioni)New partner’s Capital A/c Dr.To Sacrificing Partners’ capital A/cb)When new partner brings his/her share of goodwill in cashii)No entry passed in the books of accountsc)When new partner is unable to bring his/her share of goodwill in cashiii)Premium for goodwill A/c Dr.To sacrificing partners’ capital A/cd)When new partner brings his/her share of goodwill in cash and paid privatelyiv)Written off in old profit sharing ratioa) a- iii) b- i) c- ii) d – iv) b) a- iv) b – iii) c – i) d – ii) c) a – iv ) b – iii) c – ii) d – i) d) a – ii) b – iv) c – i) d – iii)
Answer» b) a- iv) b – iii) c – i) d – ii)

32.	What will be the value of goodwill at two the average of last three years profit years were Rs. 4,000, Rs. 5,000 and Rs. 6,000.(a) Rs. 5,000(b) Rs. 10,000(c) Rs. 8,000(d) Rs. 15,000
Answer» (b) Rs. 10,000

33.	Match the following items :a)Revaluation A/ci)Personal A/cb)Partners’ Capital A/cii)Real A/cc)Goodwilliii)Revaluation A/cd)Profit and loss adjustment A/civ)Nominal A/ca) a-ii) b- iv) c - i) d – iii) b) a- iv) b – iii) c – i) d – i) c) a – iv) b – i) c – ii) d – iii) d) a- iii) b – i) c – iv) d – ii)
Answer» c) a – iv) b – i) c – ii) d – iii)

35.	Which of the following are not the characteristics of an ideal message? a) Clear b) Concise c) Accurate d) Illusionary
Answer» Correct option: d) illusionary

36.	The excess of actual profit over the normal profit is called.(a) Super profit(b) Fixed profit(c) Net profit(d) None of these
Answer» The excess of actual profit over the normal profit is called Super profit