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CodeVID-M12-WS
Retirement and Death of a Partner — Practice Worksheet
Chapter: Retirement and Death of a Partner
Topic: Retirement and Death of a Partner
Maximum Marks: 35
Time: 30 minutes
Name: ____________________ Roll No.: __________ Date: ____________

General Instructions

  • All questions are compulsory.
  • Choose the correct option (A, B, C or D) for each question.
  • The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each) 15 × 1 = 15 marks
1.
When a partner retires, the continuing partners:
  • A.Sacrifice
  • B.Gain
  • C.Leave
  • D.Pay creditors
2.
Gaining ratio =
  • A.Old − New
  • B.New − Old
  • C.Old + New
  • D.Old × New
3.
The retiring partner's share of goodwill is paid by the:
  • A.Creditors
  • B.Gaining partners in the gaining ratio
  • C.Bank
  • D.Retiring partner
4.
Goodwill Rs 80,000; retiring partner's share 1/4. His share of goodwill =
  • A.Rs 20,000
  • B.Rs 80,000
  • C.Rs 8,000
  • D.Rs 40,000
5.
On retirement, no goodwill account is raised because of:
  • A.AS-26
  • B.AS-3
  • C.GST
  • D.The Companies Act
6.
Revaluation profit on retirement is shared by:
  • A.Continuing partners only
  • B.All partners in the old ratio
  • C.The retiring partner only
  • D.Creditors
7.
Accumulated reserves on retirement go to:
  • A.All partners in the old ratio
  • B.Continuing partners only
  • C.The bank
  • D.The new partner
8.
Unpaid dues of a retiring partner are transferred to his:
  • A.Capital A/c
  • B.Loan A/c
  • C.Drawings A/c
  • D.Reserve
9.
If not otherwise agreed, interest on a retiring partner's loan under the Act is:
  • A.6% p.a.
  • B.12% p.a.
  • C.Nil
  • D.18% p.a.
10.
On death, the amount due is paid to the:
  • A.Surviving partners
  • B.Executor
  • C.Bank
  • D.Creditors
11.
On death, the amount due is transferred to the:
  • A.Capital of survivors
  • B.Executor's Account
  • C.Realisation A/c
  • D.Revaluation A/c
12.
A deceased partner's profit to the date of death may be estimated on a time basis or a ____ basis.
  • A.Cost
  • B.Sales
  • C.Capital
  • D.Goodwill
13.
Partner (share 1/5) dies 4 months in; last year's profit Rs 90,000. Time-basis profit =
  • A.Rs 6,000
  • B.Rs 18,000
  • C.Rs 4,500
  • D.Rs 7,500
14.
Death of a partner is treated most like:
  • A.Admission
  • B.Retirement
  • C.Dissolution
  • D.A change in name
15.
Which is credited to a retiring/deceased partner's capital account?
  • A.Drawings
  • B.Share of goodwill
  • C.Interest on drawings
  • D.His share of a loss
Section B — Challenge / Olympiad (2 marks each) 10 × 2 = 20 marks
16.
A, B, C share 4:3:2. B retires; A and C continue in 4:2. The gaining ratio of A and C is:
  • A.2:1
  • B.4:2
  • C.1:1
  • D.3:2
17.
Goodwill of the firm is Rs 1,08,000; the retiring partner B's share was 1/3. A and C (gaining 2:1) are debited:
  • A.A Rs 24,000; C Rs 12,000
  • B.A Rs 18,000; C Rs 18,000
  • C.A Rs 12,000; C Rs 24,000
  • D.Equally Rs 18,000
18.
Why do ALL partners (including the retiring one) share the revaluation profit, unlike a new partner who does not?
  • A.The gain arose under the old arrangement that still included the retiring partner
  • B.The retiring partner is senior
  • C.It is a legal gift
  • D.Survivors refuse it
19.
B's dues are Rs 2,00,000, paid Rs 50,000 now and the rest in 3 equal annual instalments with 10% interest. The first instalment (principal) is:
  • A.Rs 50,000
  • B.Rs 1,50,000
  • C.Rs 66,667
  • D.Rs 15,000
20.
A partner with a 1/4 share dies on 30 June (year ends 31 March). Sales to 30 June were Rs 6,00,000; last year sales Rs 24,00,000 gave a profit of Rs 4,00,000. His profit share on the sales basis is:
  • A.Rs 25,000
  • B.Rs 1,00,000
  • C.Rs 6,250
  • D.Rs 16,667
21.
On the death of a partner, his share of goodwill is adjusted by:
  • A.Debiting the gaining partners and crediting the deceased partner's capital
  • B.Raising a goodwill account
  • C.Crediting all partners
  • D.Debiting cash
22.
If the continuing partners decide to continue in their OLD mutual ratio after a retirement, the gaining ratio equals:
  • A.Their old ratio
  • B.1:1
  • C.The retiring partner's share
  • D.The sacrificing ratio
23.
An accumulated loss (debit P&L balance) at retirement is:
  • A.Debited to all partners in the old ratio
  • B.Credited to all partners
  • C.Borne by the retiring partner alone
  • D.Ignored
24.
The Executor's Account is essentially the deceased partner's:
  • A.Loan/payable account that the firm settles over time
  • B.Capital introduced
  • C.Drawings account
  • D.Goodwill account
25.
Total goodwill of a firm is Rs 1,50,000 and a partner with a 2/5 share retires. The maximum his capital can be credited for goodwill is:
  • A.Rs 60,000
  • B.Rs 1,50,000
  • C.Rs 90,000
  • D.Rs 37,500

Answer Key

Section A — Multiple Choice (1 mark each)
  1. (B) Gain
  2. (B) New − Old
  3. (B) Gaining partners in the gaining ratio
  4. (A) Rs 20,000
  5. (A) AS-26
  6. (B) All partners in the old ratio
  7. (A) All partners in the old ratio
  8. (B) Loan A/c
  9. (A) 6% p.a.
  10. (B) Executor
  11. (B) Executor's Account
  12. (B) Sales
  13. (A) Rs 6,000
  14. (B) Retirement
  15. (B) Share of goodwill
Section B — Challenge / Olympiad (2 marks each)
  1. (A) 2:1
  2. (A) A Rs 24,000; C Rs 12,000
  3. (A) The gain arose under the old arrangement that still included the retiring partner
  4. (A) Rs 50,000
  5. (A) Rs 25,000
  6. (A) Debiting the gaining partners and crediting the deceased partner's capital
  7. (A) Their old ratio
  8. (A) Debited to all partners in the old ratio
  9. (A) Loan/payable account that the firm settles over time
  10. (A) Rs 60,000
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