Reconstitution of a Partnership Firm: Admission of Partner
17 Board Accountancy previous year questions on Reconstitution of a Partnership Firm: Admission of Partner — options free on every question; 2 include the answer & explanation free, the rest unlock with PYQ Pass.
Which of the following assets is compulsorily revalued at the time of
admission of a new partner ?
Goodwill
Correct Answer
Option D — Goodwill
Why option D is correct:
At the time of admission of a new partner, Goodwill is compulsorily revalued to determine the sacrifice made by the existing partners.
The new partner must compensate the old partners for their share of goodwill, so its valuation is essential.
Hence, Option D is correct.
Why other options are incorrect:
A. Stock — Incorrect
Stock is revalued only if its value has changed, not compulsorily.
B. Investment — Incorrect
Investments are revalued only when required, not mandatory.
C. Fixed Assets — Incorrect
Fixed assets may or may not be revalued; it depends on agreement.
When a new partner does not bring his share of goodwill in cash, then the amount is debited to
New Partner's Capital A/c
Option C — New Partner’s Capital A/c
Why option C is correct:When a new partner does not bring his share of goodwill in cash, the amount of goodwill is debited to the New Partner’s Capital Account.
This is because the new partner is required to compensate the old partners for goodwill, and in the absence of cash, his capital account is reduced.
Hence, New Partner’s Capital A/c is debited, making Option C correct.
Why other options are incorrect:A. Cash A/c — Incorrect
Cash Account is debited only when goodwill is brought in cash, which is not the case here.
B. Premium A/c — Incorrect
Premium (Goodwill) Account is credited, not debited. The question asks where the amount is debited.
D. Capital A/c of Old Partners — Incorrect
Old partners’ capital accounts are credited, not debited, for their share of goodwill.
Assets and Liabilities are shown at their revalued value in :-
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A, B & C were sharing profits & losses in the ratio of 3: 2: 1. They decided to share profits & losses equally in future. General reserve was appearing in their books at ₹60,000 . Goodwill was valued at ₹1,20,000. The partners do not want to disturb the general reserve.
The adjusting entry will be :
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On the admission of a new partner
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Decrease in the Liabilities is :-
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Change in profit sharing ratio of existing partners results in :-
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Change in the partnership agreement results in :-
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The balance of Revaluation Account is transferred to old partner’s
Capital Account in their :-
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On the admission of a new partner, increase in the value of assets is
debited to which account ?
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When a new partner bring his share of goodwill in cash, the amount is debited to
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Abhiram and Ragini are partners sharing profits in the ratio of 3:2. They admit Arun as a new partner for 1/5th share in the future profits of the firm, which he gets equally from Abhiram and Ragini. Calculate the new profit-sharing ratio of Abhiram, Ragini and Arun.
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For the right to get a share in future profits of a partnership firm, a newly admitted partner will have to bring:
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Revaluation Account is like a :
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Gaining ratio is :-
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In which ratio, the cash brought in for goodwill by the new partner is shared by the existing partners?
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Revaluation Account is prepared at the time of
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