Topper’s Akademia

Accountancy – Test Paper(3-5)

Time : 1 hours

QUESTION 1
X and Y shared profits & loss in the ratio of 2:3. staring 1st April 2019, they agreed to distribute profits
equally. The firm goodwill was valued at ₹ 60,000. The adjustment entry will be.
1) Dr. Y and Cr. X with ₹6,000
2) Dr. X and Cr. Y with ₹6,000
3) Dr. X and Cr. Y with ₹6,00
4) Dr. Y and Cr. X with ₹6,00
QUESTION 2
X, Y, and Z are partners sharing profits in the ration of 5:3:2. They decided to share future profits in the
ration 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

QUESTION 3
Anu and Bala distributed profits and losses in the ratio 3:2 starting 1st April 2019, they accepted to
distribute profits evenly. Goodwill of the business was accounted for at ₹50,000. Prepare the journal for
the accounting of goodwill:
When the goodwill is adjusted through Partners’ Capital Account
QUESTION 4
A, B, and C 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
 Topper’s Akademia
Accountancy – Test Paper(3-5)

QUESTION 5
A, B, and C are partners sharing profits in the ratio of 5:3:2. They decided to share the profits in the ratio
of 2:3:5. Starting 1st April, they decided to adjust the following accumulated profits, losses and reserves
without affecting their book values, bypassing an adjustment entry.

Book Values ₹

Profit and Loss Account 15,000

General Reserve 60,000
Advertising Suspense Account 30,000

The necessary adjustment entry will be:

1) Dr. C and Cr. A with ₹13,500
2) Dr. A and Cr. C with ₹13,500
3) Dr. B and Cr. A with ₹13,500
4) Dr. A and Cr. B with ₹13,500

QUESTION 6
State accounting treatment for transfer of Reserves and Accumulated profits
QUESTION 7
Hardeep and Sandeep are partners sharing profits in the ratio of 4:1. They decided to distributed profits
equally starting 1st April 2019. Their balance sheet as on 31st March 2019 shows a balance of
advertisement suspense of ₹20,000. Pass the journal entry at the time of change in profit-sharing ratio.
QUESTION 8
X and Y are partners in firm sharing profits in the ratio 3: 2. hey decided to share future profit equally.
On the date of a change in the profit-sharing ratio, profit and loss account showed a debit balance of
₹50,000. Pass journal entry for distribution of balance in profit and loss account immediately before the
change in the profit-sharing ratio.
QUESTION 9
Revaluation Account or Profit and Loss Adjustment Account is a.
1) Real Account
2) Nominal Account
3) Personal Account
4) None of the above
QUESTION 10
The balance in the investment fluctuation fund, after meeting the loss on revaluation of investments, at
the time of admission of a partner will be transferred to
1) The old partners’ capital account
2) The revaluation Account
3) The General Reserve
4) None of the above
QUESTION 11
If the incoming partner is to bring in premium for goodwill in cash also a balance exists in the goodwill
account, then this goodwill account is written off among the old partners in.
1) The new profit-sharing ratio
2) The old profit-sharing ratio
 Topper’s Akademia
Accountancy – Test Paper(3-5)

3) The Sacrifice Ratio

4) None of the above
QUESTION 12
X and Y are partners sharing profits in the ratio of 2:1. They admit Z into the partnership for 1/4 the
share in profits for which he brings in ₹20,000 as his share of capital. Hence, the adjusted capital of the X
and Y will be
1) ₹40,000 and ₹20,000 respectively
2) ₹32,000 and ₹16,000 respectively
3) ₹60,000 and ₹30,000 respectively
4) None of the above
QUESTION 13
When A and B contribute to profit and loss ration at 3:3. Admit C is a partner giving him a 1/5th share of
profits. This will be given by A and B

1) Equally
2) In the ratio of their profit
3) In the ratio of their capital
4) None of the above
QUESTION 14
When a partner brings cash for goodwill, the amount is credited to
1) The premium for goodwill account
2) Capital account of the new partner
3) Cash account
4) None of the above
QUESTION 15
A and B share profit and loss in the ration 2/3 and 1/3. Admit C as a partner giving him 1/4 share. The
new profit-sharing ratio will be
1) 1/2, 1/4, 1/4
2) 1/3, 1/3, 1/4
3) 3/8, 3/8, 2/8

QUESTION 16
The current account of a partner
(1) Will always have a credit balance
(2) Will always have a debit balance
(3) May have a debit or credit balance
(4) Can never have a debit balance
QUESTION 17
Interest payable on the capitals of the partners is charged to
(1) Profit and Loss Account
(2) Profit and Loss Adjustment Account
(3) Realization Account
(4) Profit and Loss Appropriation Account
QUESTION 18
Interest on partner’s drawing under a fluctuating capital account is debited to
 Topper’s Akademia
Accountancy – Test Paper(3-5)

(1) Partner’s Capital Account

(2) Profit and Loss Account
(3) Drawing Account
(4) None of the above
QUESTION 19
Explain the format of the profit and loss appropriation account.

QUESTION 20
X, Y and Z are sharing profits and losses in the ratio of 5:3:2. They decide to share future profits and
losses in the ratio of 2:3:5 with effect from 1st April, 2002. They also decide to record the effect of the
reserves without affecting their book figures, by passing a single adjusting entry.

Book Figure
General Reserve Rs. 40,000
Profit 2 loss A/C (Cr) Rs. 10,000
Advertisement Suspense A/C(Dr) Rs. 20,000
Pass the necessary single adjusting entry.

QUESTION 21
A and B were partners in the ratio of 3:2. They admit C for 3/13th share. New profit ratio after C’s
admission will be 5:5:3. C brought some assets in the form of his capital and for the share of his
goodwill.
Following were the assets:
Assets Rs.
Stock 2,44,000
Building 2,40,000
Plant and Machinery 1,40,000
At the time of admission of C goodwill of the firm was valued at Rs. 12,48,000.
Pass necessary journal entries.
QUESTION 22
Ranzeet and Priya are two partners sharing profits in the ratio of 3:2. They admit Nilu as a partner, who
pays Rs. 60,000 as capital. The new ratio is fixed as 3:1:1. The value of goodwill of the firm was
determined at Rs. 50,000. Show journal entries if Nilu brings goodwill for her share in cash.
QUESTION 23
Rakhi and Parul are partners sharing profits in the ratio of 3:1. Neha is admitted as a partner. The new
profit sharing ratio among Rakhi, Parul and Neha is 2:3:2. Find out the sacrificing ratio.
QUESTION 24
A, B and C were partners in a firm having capitals of Rs. 60,000, Rs. 60,000 and Rs. 80,000 respectively.
Their current account balances were A- Rs. 10,000, B- Rs. 5000 and C- Rs. 2000 (Dr.). According to the
partnership deed the partners were entitled to an interest on capital @ 5% p.a. C being the working
partner was also entitled to a salary of Rs. 6,000 p. a. The profits were to be divided as follows:
(i) The first Rs. 20,000 in proportion to their capitals.
(ii) Next Rs. 30,000 in the ratio of 5:3:2.
(iii) Remaining profits to be shared equally.
During the year the firm made a profit of Rs. 1,56,000 before charging any of the above items.
Prepare the profit and loss appropriate on A/C.