DATE: 14/08/2021

ACCOUNTANCY TIME: 1 Hr.

WEEKLY TEST Marks: 30
I. Choose the correct Answer: (20 X1= 20)

1. Sacrificing Ratio :
(A) New Ratio – Old Ratio
(B) Old Ratio – New Ratio
(C) Old Ratio – Gaining Ratio
(D) Gaining Ratio – Old ratio

2. Gaining Ratio :
(A) New Ratio – Sacrificing Ratio
(B) Old Ratio – Sacrificing Ratio
(C) New Ratio – Old Ratio
(D) Old Ratio – New Ratio

3. A and B were partners in a firm sharing profit or loss equally. With effect from 1st
April 2019 they agreed to share profits in the ratio of 4 : 3. Due to change in profit
sharing ratio, A’s gain or sacrifice will be :
(A) Gain 1/14
(B) Sacrifice 1/14
(C) Gain 4/7
(D) Sacrifice 3/7

4. A and B were partners in a firm sharing profits and losses in the ratio of 2 : 1.
With effect from 1st January 2019 they agreed to share profits and losses equally.
Individual partner’s gain or sacrifice due to change in the ratio will be :

5. A, B and C were partners in a firm sharing profits and losses in the ratio of 4 : 3 :
2. The partners decide to share future profits and losses in the ratio of 2:2: 1. Each
partner’s gain or sacrifice due to change in the ratio will be :

6. The excess amount which the firm can get on selling its assets over and above
the saleable value of its assets is called :
(A) Surplus
(B) Super profits
(C) Reserve
(D) Goodwill

7. Which of the following is NOT true in relation to goodwill?

(A) It is an intangible asset
(B) It is fictitious asset
(C) It has a realisable value
(D) None of the above

8. P and Q were partners sharing profits and losses in the ratio of 3 : 2. They
decided that with effect from 1st January, 2019 they would share profits and losses
in the ratio of 5 : 3. Goodwill is valued at ? 1,28,000. In adjustment entry :
(A) Cr. P by ₹3,200; Dr. Q by ₹3,200
(B) Cr. P by ₹37,000; Dr. Q by ₹37,000
(C) Dr. P by ₹37,000; Cr. Q by ₹37,000
(D) Dr. P by ₹3,200 Cr. Q by ₹3,200

9. P, Q and R were partners in a firm sharing profits in 5 : 3 : 2 ratio. They decided to

share the future profits in 2 : 3 : 5. For this purpose the goodwill of the firm was
valued at ₹1,20,000. In adjustment entry for the treatment of goodwill due to change
in the profit sharing ratio :
(A) Cr. P by ₹24,000; Dr. R by ₹24,000
(B) Cr. P by ₹60,000; Dr. R by ₹60,000
(C) Cr. P by ₹36,000; Dr. R by ₹36,000
(D) Dr. P by ₹36,000; Cr. R by ₹36,000

10. A, B and C are partners in a firm sharing profits in the ratio of 3 : 4 : 1. They
decided to share profits equally w.e.f. 1 st April, 2019. On that date the Profit and
Loss Account showed the credit balance of ?96,000. Instead of closing the Profit and
Loss Account, it was decided to record an adjustment entry reflecting the change in
profit sharing ratio. In the journal entry :
(A) Dr. A by ₹4,000; Dr. B by ₹16,000; Cr. C by ₹20,000
(B) Cr. A by ₹4,000; Cr. B by ₹16,000; Dr. C by ₹20,000
(C) Cr. A by ₹16,000; Cr. B by ₹4,000; Dr. C by ₹20,000
(D) Dr. A by ₹16,000; Dr. B by ₹4,000; Cr. C by ₹20,000

11. A, B and C are partner sharing profits in the ratio of 1 : 2 : 3. On 1-4-2019 they
decided to share the profits equally. On the date there was a credit balance of ?
1,20,000 in their Profit and Loss Account and a balance of ? 1,80,000 in General
Reserve Account. Instead of closing the General Reserve Account and Profit and
Loss Account, it is decided to record an adjustment entry for the same. In the
necessary adjustment entry to give effect to the above arrangement:
(A) Dr. A by ₹50,000; Cr. B by ₹50,000
(B) Cr. A by ₹50,000; Dr. B by ₹50,000
(C) Dr. A by ₹50,000; Cr. Cby ₹50,000
(D) Cr. A by ₹50,000; Dr. Cby ₹50,000

12. X, Y and Z are partners in a firm sharing profits in the ratio 4 : 3 : 2. Their
Balance Sheet as at 31-3-2019 showed a debit balance of Profit & Loss A/c
₹1,80,000. From 1-4-2019 they will share profits equally. In the necessary journal
entry to give effect to the above arrangement when A Y and Z decided not to close
the Profit & Loss Acccount:
(A) Dr. X by ₹20,000; Cr. Z by ₹20,000
(B) Cr. X by ₹20,000; Dr. Z by ₹20,000
(C) Dr. X by ₹40,000; Cr. Z by ₹40,000
(D) Cr. X by ₹40,000; Dr. Z by ₹40,000

13. Aran and Varan are partners sharing profits in the ratio of 4 : 3. Their Balance
Sheet showed a balance of ? 5 6,000 in the General Reserve Account and a debit
balance of ? 14,000 in Profit and Loss Account. They now decided to share the
future profits equally. Instead of closing the General Reserve Account and Profit and
Loss Account, it is decided to pass an adjustment entry for the same. In adjustment
entry :
(A) Dr. Aran by ₹3,000; Cr. Varan by ₹3,000
(B) Dr. Aran by ₹5,000; Cr. Varan by ₹5,000
(C) Cr. Aran by ₹5,000; Dr. Varan by ₹5,000
(D) Cr. Aran by ₹3,000; Dr. Varan by ₹3,000

14. X Y and Z are partners sharing profits and losses in the ratio 5 : 3 : 2. They
decide to share the future profits in the ratio 3 : 2 : 1. Workmen compensation
reserve appearing in the balance sheet on the date if no information is available for
the same will be :
(A) Distributed to the partners in old profit sharing ratio
(B) Distributed to the partners in new profit sharing ratio
(C) Distributed to the partners in capital ratio
(D) Carried forward to new balance sheet without any adjustment
15. Any change in the relationship of existing partners which results in an end of the
existing agreement and enforces making of a new agreement is called (C.B.S.E.
Sample Paper, 2015)
(A) Revaluation of partnership.
(B) Reconstitution of partnership.
(C) Realization of partnership.
(D) None of the above.

16. X, Y, and Z are partners sharing profits in the ration of 5:3:2. They decided to share future
profits in the ratio of 2:3:5 starting 1st April 2019. They also decided to record the effect of the
following revaluations without affecting the book values of assets and liabilities, by passing an
adjusting entry:

Book Values (₹) Revised Values (₹)

Land and Building 3,00,000 4,50,000

Plant and Machinery 4,50,000 4,20,000
Trade Creditors 1,50,000 1,35,000
Outstanding Rent 1,35,000 1,80,000

The necessary adjustment entry will be:

1) Dr. Z and Cr. X by ₹ 27,000
2) Dr. X and Cr. Z by ₹ 27,000
3) Dr. Y and Cr. X by ₹ 27,000
4) Dr. X and Cr. Y by ₹ 27,000
17. X, Y, and Z are partners sharing profits in the ration of 5:3:2. They decided to share future
profits in the ratio of 2:3:5. What will be the accounting treatment of the workmen compensation
reserve appearing in the balance sheet on the date when no information is available for the
same?
1) Distributed among the partners in their capital ratio
2) Distributed among the partners in their new profit-sharing ratio
3) Distributed among the partners in their old profit-sharing ratio
4) Carried forward to a new balance sheet

18. X, Y, and Z are partners sharing profits in the ratio of 5:3:2. They decided to share the profits

Book Values ₹

Profit and Loss Account 15,000

General Reserve 60,000
Advertising Suspense Account 30,000
in the ratio of 2:3:5. Starting 1st April, 2019 they decided to adjust the following accumulated
profits, losses and reserves without affecting their book values, by passing an adjustment entry.
The necessary adjustment entry will be:
1) Dr. Z’s Capital A/c and Cr. X’s Capital A/c with Rs.31,500.
2) Dr. Y’s Capital A/c and Cr. X’s Capital A/c with Rs. 13,500.
3) Dr. X’s Capital A/c and Cr. Z’s Capital A/c with Rs. 13,500.
4) Dr. Y’s Capital A/c and Cr. Z’s Capital A/c with Rs. 31,500.

19. X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1. They
decided to share future profits equally. The Profit and Loss Account showed a Credit
balance of ₹60,000 and a General Reserve of ₹30,000. If these are not to be shown
in balance sheet, in the journal entry :
(A) Cr. X by ₹15,000: Dr. Z by ₹15,000
(B) Dr. X by ₹15,000; Cr. Z by ₹15,000
(C) Cr. X by ₹45,000; Cr. Y by ₹30,000; Cr. Z by ₹15,000
(D) Cr. X by ₹30,000; Cr. Y by ₹30,000; Cr. Z by ₹30,000

20. The average capital employed of a firm is ?4,00,000 and the normal rate of
return is 15%. The average profit of the firm is ?80,000 per annum. If the .
remuneration of the partners is estimated to be ? 10,000 per annum, then on the
basis of two years purchase of super-profit, the value of the Goodwill will be :
(A) ₹10,000
(B) ₹20,000
(C) ₹60,000
(D) ₹80,000

II .Answer the following : (2X5 = 10)

21. X, Y and Z who are presently sharing profits and losses in the ratio of 5: 3: 2 decide to
share future profits and losses in the ratio of 2:3:5. Give the Journal entry to distribute
‘Workmen Compensation Reserve’ of Rs.1,20,000 at the time of change in profit-sharing
ratio, when there is a claim of Rs.80,000 against it.

22. A, B and C who are presently sharing profits and losses in the ratio of 5:3:2 decide to
share future profits and losses in the ratio of 2:3:5. Give the Journal entry to distribute
‘Investment Fluctuation Reserve’ of Rs.20,000 at the time of change in profit-sharing ratio,
when investment (market value Rs.95,000) appears at Rs.1, 00,000.