R4RIN – MCQs, Mock Tests | ICSE XII MCQ Questions for Class 12 Accountancy set-4

A firm has an average profit of ₹ 60,000 Rate of return on capital employed is 12.5% p.a. Total capital employed in the firm was ₹ 4,00,000. Goodwill on the basis of two years purchase of super profit is :

1. ₹ 20,000
2. ₹ 15,000
3. ₹ 10,000
4. None of these

✅ Correct Answer: 1

Under capitalisation method, goodwill is calculated by :

1. Average Profit x No. of Years’ Purchase
2. Super Profit x No. of Years’ Purchase
3. Total of the discounted value of expected future benefits
4. Super Profit -r Expected Rate of Return

✅ Correct Answer: 4

“Goodwill is nothing more than probability that the old customer will resort to the old place.” This definition of goodwill was given by :

1. Spicer and Pegler
2. ICAI
3. Lord Eldon
4. AICPA

✅ Correct Answer: 3

What will be the value of goodwill at twice the average of last three years profit if the profits of the last three years were ₹ 4,000, ₹ 5,000 and ₹ 6,000 ?

1. ₹ 5,000
2. ₹ 10,000
3. ₹ 8,000
4. None of these

✅ Correct Answer: 2

The Valuation of Goodwill is not necessary in Sole Trading:

1. On selling the Firm
2. On making a partner
3. On estimation of Assets
4. On Closing the Firm

✅ Correct Answer: 4

The first book of original entry is-

1. Journal
2. Ledger
3. Trial Balance
4. None of these.

✅ Correct Answer: 2

‘Drawings’ falls under which account-

1. Personal account
2. Real account
3. Nominal account
4. None of these.

✅ Correct Answer: 1

Income tax is treated as-

1. Business Expense
2. Direct Expense
3. Personal Expense
4. Indirect Expense.

✅ Correct Answer: 4

A cheque on which two parallel lines are drawn in the left top corner is called –

1. Bearer cheque
2. Traveller’s cheque
3. Account payee cheque
4. None of these.

✅ Correct Answer: 3

Cash purchase of goods is recorded in-

1. Purchase book
2. Sales book
3. Cash – book
4. None of these.

✅ Correct Answer: 3

Credit purchase of furniture shall be recorded in-

1. Purchase book
2. Journal book
3. Cash – book
4. None of these.

✅ Correct Answer: 2

Who prepares a debit note-

1. Seller
2. Purchaser
3. Cashier
4. None of these.

✅ Correct Answer: 1

Return of goods by a customer is recorded in-

1. Purchase book
2. Sales book
3. Sales return book
4. Purchase return book.

✅ Correct Answer: 3

On retirement of a partner’s the amount of General Reserve is transferred to all partner’s capital account in:

1. New Profit Sharing Ratio
2. Capital Ratio
3. Old Profit Sharing Ratio
4. None of these

✅ Correct Answer: 3

x,y are z are partners and share profits in the ratio of 5 : 3 : 2. y retires and x takes 1/10 from y and z takes 1/5 from y. The new profit sharing ratio will be :

1. 7 : 13
2. 13 : 7
3. 3 : 2
4. 1 : 1

✅ Correct Answer: 3

The old profit-sharing ratio among Rajender, Satish and Tejpal were 2 : 2 : 1. The new profit-sharing ratio after Satish’s retirement is 3 : 2. The gaining ratio is :

1. 3 : 2
2. 2 : 1
3. 1 : 1
4. 2 : 3

✅ Correct Answer: 3

The amount due to the deceased partner is paid to his……….

1. Father
2. Friend
3. Wife
4. Executors

✅ Correct Answer: 4

In case of death of a partner, the whole amount standing to the credit of his capital account is transferred to :

1. Capital Accounts of all partners
2. Capital Accounts of remaining partners
3. His Executor’s Account
4. Account of the Government

✅ Correct Answer: 3

On the death of a partner in a firm payments are made to;

1. Capital A/c
2. Executor’s A/c
3. Current A/c
4. Loan A/c

✅ Correct Answer: 2

The executors of deceased partner will be paid interest on the amount due from the date of death of the partner at:

1. 5% p.a.
2. 6% p.a.
3. 7% p.a.
4. 8% p.a.

✅ Correct Answer: 2

In the event of death of a partner, the accumulated profits and losses are shared by the partners in their:

1. Old Profit-sharing Ratio
2. New Profit-sharing Ratio
3. Capital Ratio
4. None of these

✅ Correct Answer: 1

On the death of a partner, the amount of Joint Life Insurance Policy is credited to the Capital Accounts of:

1. Only the deceased partner
2. All partners including the deceased partner
3. Remaining partners, in the new profit-sharing ratio
4. Remaining partners, in their old profit-sharing ratio

✅ Correct Answer: 2

On death of a partner, the remaining partner(s) who have gained due to change in profit-sharing ratio should compensate the:

1. Deceased partner
2. Remaining partners (who have sacrificed) as well as decreased partner
3. Remaining partners (who have sacrificed)
4. None of these

✅ Correct Answer: 1

B, C and D are partners sharing profit in the ratio 7:5:4. D died on 30th June, 2016 and profits for the year 2015-16 were ₹ 12,000. How much share in profits for the period 1st April, 2016 to 30th June, 2016 will be credited to D’s Account:

1. ₹ 3,000
2. ₹ 750
3. Nil
4. ₹ 1,000

✅ Correct Answer: 2

A, B and C are partners sharing profits and losses in the ratio of 2 : 2 : 1. C died on 31st March, 2016. The profits of the financial year ending 31st March, 2016 is ₹ 64,000. The share of the deceased partner in the profits will be:

1. ₹ 9,200
2. ₹ 12,800
3. ₹ 3,100
4. ₹ 6,100

✅ Correct Answer: 2

JLP of the partners is a/an…………..account

1. Nominal
2. Personal
3. Liability
4. Asset

✅ Correct Answer: 4

Joint Life Policy amount received by a firm is distributed in:

1. Opening Capital Ratio
2. Closing Capital Ratio
3. Old Profit-sharing Ratio of Partners
4. New Profit-sharing Ratio

✅ Correct Answer: 3

A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. They had a Joint Life Policy of ₹ 3,00,000. Surrender value of JLP in Balance Sheet is ₹ 90,000. C dies what is share of each partner in JLP ?

1. ₹ 1,05,000 ; ₹ 70,000; ₹ 35,000
2. ₹ 45,000 ; ₹ 30,000; ₹ 15,000
3. ₹ 1,50,000 ; ₹ 1,00,000 ; ₹ 50,000
4. ₹ 1,95,000 ; ₹ 1,30,000 ; ₹ 65,000

✅ Correct Answer: 3

X, Y and Z are partners sharing profits in the ratio of 7 : 5 :4. On 30th June, 2015 Z died and profits for the year ending 31st March, 2016 were ₹ 2,40,000. How much share in profits for the period 1st April to 30th June, 2015 will be credited to Z’s account assuming the profit occurred evenly throughout the year ;

1. ₹ 60,000
2. ₹ 15,000
3. ₹ 20,000
4. Nil

✅ Correct Answer: 2

Revaluation Account is prepared at the time of …………

1. Admission of a partner
2. Retirement of a partner
3. Death of a partner
4. All of the above

✅ Correct Answer: 4

As per section 37 to the Indian Partnership Act, 1932, the executors would be entitled at their choice to interest calculated from the date of death till the date of payment on the final amount due to the deceased partner at………..percent per annum.

1. 7
2. 4
3. 6
4. 8

✅ Correct Answer: 3

X, Y and Z are the partners sharing profits in the ratio 2 : 1 : 1. Firm has a joint life policy of ₹ 1,20,000 and in the balance sheet it is appeaming at the surrender value, i.e., ₹ 20,000. On the death of X how this JLP will be distributed among partners:

1. 50,000 : 25,000 : 25,000
2. 60,000 : 30,000 : 30,000
3. 40,000 : 35,000 : 25,000
4. whole ₹ 1,20,000 to A

✅ Correct Answer: 2

On death of a partner, the firm gets for joint life policy taken for all partners.

1. Policy amount
2. Surrender value
3. Policy amount of deceased partner
4. Surrender value of all partners

✅ Correct Answer: 1

A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1. On 1.3.2016 C died. The average profits of the firm for last four years were ₹ 72,000 Books are closed on 31st December. C’s share of profit till the date of his death will be:

1. ₹ 2,000
2. ₹ 12,000
3. ₹ 1,400
4. ₹ 24,000

✅ Correct Answer: 1

A, B and C are partners sharing profits and losses in the ratio of 3 : 2 :1. C dies and goodwill of the firm is valued at ₹ 60,000. The amount payable to the executor’s of the deceased partner will be :

1. ₹ 30,000
2. ₹ 25,000
3. ₹ 10,000
4. ₹ 20,000

✅ Correct Answer: 3

M, L and A are partners sharing profits in the ratio of 9:4:3. They have taken a joint life policy of ₹ 96,000. A dies. What is the share of A in the JLP amount ?

1. ₹ 18,000
2. ₹ 24,000
3. ₹ 54,000
4. ₹ 20,000

✅ Correct Answer: 1

Which account is prepared at the time retirement or death of a partner to show the changes in the value of assets and liabilities:

1. Revaluation A/c
2. Realisation A/c
3. Partner’s Capital A/c
4. None of these

✅ Correct Answer: 1

What are the methods of calculating share of the deceased partner in the profit of the firm upto the date of death:

1. On time basis
2. On sales basis
3. Both (a) and (b)
4. None of these

✅ Correct Answer: 3

If three partners A, B & C are sharing profits as 5:3:2, then on the death of a partner A, how much B & C will pay to A’s executor on account of goodwill ? Good-will is to be calculated on the basis of 2 years purchase of last 3 years average profits. Profits for the last three years are 10,80,000 Rs. :

1. ₹ 2,16,000 and ₹ 1,42,000
2. ₹ 2,44,000 and ₹ 2,16,000
3. ₹ 3,60,000 and ₹ 2,16,000
4. ₹ 2,16,000 and ₹ 1,44,000

✅ Correct Answer: 4

On death of a partner, his excutor is paid the profits of the deceased partner for the relevant period. This payment is recorded in Profit & Loss A/c :

1. Adjustment
2. Appropriation
3. Suspense
4. Reserve

✅ Correct Answer: 3

On the retirement of a partner any accumulated profit should be credited to the capital accounts of:

1. All partners in old profit-sharing ratio
2. Remaining partners in new profit-sharing ratio
3. Retiring partner only in his share
4. None of these

✅ Correct Answer: 1

On the retirement of a partner, full amount of goodwill may be credited to the capital accounts of:

1. Retiring partners
2. Remaining partners
3. All partners
4. None of these

✅ Correct Answer: 3

Outgoing partner is compensated for parting with firm’s future profits in favour of remaining partners. The remaining partners contribute to such compensation in:

1. Gaining Ratio
2. Capital Ratio
3. Sacrificing Ratio
4. Profit-sharing Ratio

✅ Correct Answer: 1

Gaining ratio is calculated :

1. At the time of admission of a new partner
2. At the time of retirement of a partner
3. On the dissolution of partnership firm
4. None of these

✅ Correct Answer: 2

How unrecorded assets are treated at the time of retriement of a partner ?

1. Credited to Revaluation Account
2. Credited to Capital Account of Retiring Partner
3. Debited to Revaluation Account
4. Credited to Partner’s Capital Accounts

✅ Correct Answer: 1

On the retirement of a partner, profit on revaluation of assets and liabilities should be credited to the Capital Accounts of:

1. All partners in the old profit-sharing ratio
2. The remaining partners in their old profit-sharing ratio
3. The remaining partners in their new profit-sharing ratio
4. None of these

✅ Correct Answer: 1

On retirement of a partner, the retiring Partner’s Capital Account will be credited with:

1. His/her share of goodwill
2. Goodwill of the firm
3. Share of goodwill of remaining partners
4. None of these

✅ Correct Answer: 1

Joint life policy be taken by the firm on the lives of:

1. All the partners jointly
2. All the partners separately
3. All employees of the firm
4. Both (a) and (b)

✅ Correct Answer: 4

A, Band Care equal partners in a firm. B retires and the remaining partners decide to share profits of the new firm in the ratio of 5 : 4. Gaining ratio will be:

1. 2 : 1
2. 1 : 2
3. 4 : 5
4. 5 : 4

✅ Correct Answer: 1

The amount of General Reserve is transferred to all partner’s capital accounts in:

1. New Profit-sharing Ratio
2. Capital Ratio
3. Old Profit-sharing Ratio
4. None of these

✅ Correct Answer: 3