Admission of new partner MCQs

AccountingQnA.com has 9 Admission of new partner MCQs

At the time of admission, an incoming partner contributes as goodwill:

  • A. In form of cash
  • B. Does not pay cash
  • C. may or may not pay cash for goodwill
  • D. None
  • Correct Answer: Option C

At the time of admission of a new partner the firm is:

  • A. dissolved
  • B. Continued
  • C. Not affected
  • D. None
  • Correct Answer: Option A

An incoming partner pays his share of goodwill in cash, and profit sharing ratio of old partner is changed, goodwill will be distributed among old partners:

  • A. As their old profit ratio
  • B. according to new ratio
  • C. according to sacrifice made by them
  • D. None
  • Correct Answer: Option B

Value of goodwill agreed upon $30,000. C, an incoming partner, purchases 1/4th share of total profit. Goodwill will be raised in the book:

  • A. 30000
  • B. 15000
  • C. 7500
  • D. None
  • Correct Answer: Option C

Goodwill is valued attwo years purchased of the average profits of three previous years which are $15,000 the value of goodwill be:

  • A. 15000
  • B. 30000
  • C. 20000
  • D. None
  • Correct Answer: Option B

A & B are partners in a firm with capital of $1,00,000 and $1,50,000, C purchased half interest of A for $1,20,000. The amount credited to C’s capital will be:

  • A. 50000
  • B. $1,20,000
  • C. $1,00,000
  • D. 70000
  • Correct Answer: Option A

In a firm John’s capital being &40,000 and Harry’s $60,000. Micheal purchased john’s interest for $50,000, the amount of goodwill paid to John will be:

  • A. 50000
  • B. 10000
  • C. 40000
  • D. None
  • Correct Answer: Option B

Total proprietorship of the business is increased:

  • A. at the admission of a new partner
  • B. by the purchase of asset
  • C. by admission through investment
  • D. None
  • Correct Answer: Option C

If incoming partner purchases share from an old partner it:

  • A. reduce total ownership
  • B. increase ownership
  • C. brings no change in ownership
  • D. None
  • Correct Answer: Option C