Online Test — Retirement and Death of a Partner
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
When a partner retires, the continuing partners:
Sacrifice
Gain
Leave
Pay creditors
Explanation: They take over his share, so they gain.
Question 2 of 15
Gaining ratio =
Old − New
New − Old
Old + New
Old × New
Explanation: Gaining ratio = New share − Old share.
Question 3 of 15
The retiring partner's share of goodwill is paid by the:
Creditors
Gaining partners in the gaining ratio
Bank
Retiring partner
Explanation: The gainers pay it in their gaining ratio.
Question 4 of 15
Goodwill Rs 80,000; retiring partner's share 1/4. His share of goodwill =
Rs 20,000
Rs 80,000
Rs 8,000
Rs 40,000
Explanation: 80,000 × 1/4 = 20,000.
Question 5 of 15
On retirement, no goodwill account is raised because of:
AS-26
AS-3
GST
The Companies Act
Explanation: AS-26 bars self-generated goodwill.
Question 6 of 15
Revaluation profit on retirement is shared by:
Continuing partners only
All partners in the old ratio
The retiring partner only
Creditors
Explanation: All partners (incl. retiring) in the old ratio.
Question 7 of 15
Accumulated reserves on retirement go to:
All partners in the old ratio
Continuing partners only
The bank
The new partner
Explanation: All partners in the old ratio.
Question 8 of 15
Unpaid dues of a retiring partner are transferred to his:
Capital A/c
Loan A/c
Drawings A/c
Reserve
Explanation: Unpaid dues go to his loan account, carrying interest.
Question 9 of 15
If not otherwise agreed, interest on a retiring partner's loan under the Act is:
6% p.a.
12% p.a.
Nil
18% p.a.
Explanation: 6% p.a. applies if not agreed.
Question 10 of 15
On death, the amount due is paid to the:
Surviving partners
Executor
Bank
Creditors
Explanation: It is paid to the deceased partner's executor.
Question 11 of 15
On death, the amount due is transferred to the:
Capital of survivors
Executor's Account
Realisation A/c
Revaluation A/c
Explanation: It is transferred to the executor's account.
Question 12 of 15
A deceased partner's profit to the date of death may be estimated on a time basis or a ____ basis.
Cost
Sales
Capital
Goodwill
Explanation: Time basis or sales (turnover) basis.
Question 13 of 15
Partner (share 1/5) dies 4 months in; last year's profit Rs 90,000. Time-basis profit =
Rs 6,000
Rs 18,000
Rs 4,500
Rs 7,500
Explanation: 90,000 × 4/12 × 1/5 = 6,000.
Question 14 of 15
Death of a partner is treated most like:
Admission
Retirement
Dissolution
A change in name
Explanation: Death is treated like retirement, paid to the executor.
Question 15 of 15
Which is credited to a retiring/deceased partner's capital account?
Drawings
Share of goodwill
Interest on drawings
His share of a loss
Explanation: His share of goodwill is credited (drawings/losses are debited).