Online Test — Reconstitution: Change in Profit-Sharing Ratio
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
A change in the profit-sharing ratio is a form of:
Dissolution
Reconstitution
Liquidation
Amalgamation
Explanation: It reconstitutes the partnership.
Question 2 of 15
Sacrificing ratio =
New − Old
Old − New
Old × New
Old + New
Explanation: Sacrificing ratio = Old share − New share.
Question 3 of 15
Gaining ratio =
New − Old
Old − New
Old + New
Old ÷ New
Explanation: Gaining ratio = New share − Old share.
Question 4 of 15
A and B share 3:2 and change to 1:1. A's position is:
Gain 1/10
Sacrifice 1/10
No change
Gain 1/5
Explanation: A: 3/5 − 1/2 = 1/10 sacrifice.
Question 5 of 15
On a change in PSR, the gaining partner:
Receives goodwill
Compensates the sacrificing partner
Leaves
Pays nothing
Explanation: The gainer compensates the sacrificer for goodwill.
Question 6 of 15
The goodwill adjustment entry debits the:
Sacrificing partner's capital
Gaining partner's capital
Goodwill A/c
Bank A/c
Explanation: Gaining partner's capital is debited; sacrificer's credited.
Question 7 of 15
Goodwill Rs 40,000; B gains 1/4. Adjustment amount =
Rs 10,000
Rs 40,000
Rs 4,000
Rs 1,000
Explanation: 40,000 × 1/4 = 10,000.
Question 8 of 15
Self-generated goodwill is not raised in the books because of:
AS-26
AS-3
The Companies Act
GST law
Explanation: AS-26 bars recording self-generated goodwill.
Question 9 of 15
Accumulated reserves are distributed in the ____ ratio on a change in PSR.
New
Old
Gaining
Equal
Explanation: They belong to old partners in the old ratio.
Question 10 of 15
An accumulated loss (debit P&L balance) is ____ the old partners.
Credited to
Debited to
Ignored for
Paid by outsiders to
Explanation: Losses are debited to old partners in the old ratio.
Question 11 of 15
An increase in an asset is ____ in the Revaluation Account.
Debited
Credited
Ignored
A liability
Explanation: An asset increase is a gain — credited.
Question 12 of 15
An increase in a liability is ____ in the Revaluation Account.
Credited
Debited
Ignored
A gain
Explanation: A liability increase is a loss — debited.
Question 13 of 15
Creating a provision for doubtful debts is ____ in Revaluation.
A gain (credit)
A loss (debit)
Ignored
An asset
Explanation: It reduces debtors — a loss, debited.
Question 14 of 15
An unrecorded asset brought into account is:
A loss (debit)
A gain (credit)
Ignored
A liability
Explanation: An unrecorded asset is a gain — credited.
Question 15 of 15
Revaluation profit/loss is shared in the:
New ratio
Old ratio
Gaining ratio
Capital ratio
Explanation: It is shared in the old ratio.