Important Questions with Answers for CBSE Class 12 Accountancy Chapter 6 – Retirement/Death of a Partner which is outlined by expert Accountancy teachers from the latest version of CBSE (NCERT) books.
Class 12 Accountancy Chapter-6 Important Questions
Explain Retirement of a partner.
Answer: Retirement of partner refers to retiring from the partnership, i.e., ceasing to be a partner of the enterprise. A partner may retire from the firm anytime in the following scenarios:
- If there exists an agreement to that effect
- If all the partners agree to his retirement
During the retirement of a partner, if goodwill appears in the Balance Sheet, it must be written off and the capital a/c of all the partners are debited in
a. The old profit sharing ratio
b. The new profit sharing ratio
c. The capital ratio
d. None of the above
Answer: a. The old profit sharing ratio
X, Y and Z are partners sharing profits in the ratio of 2:2:1. Z retired. The new profit sharing ratio between X and Y will be,
Answer: b. 1:1
The share of the goodwill of a retiring partner is debited to remaining partners in their,
a. Capital Ratio
b. New Ratio
c. Gaining Ratio
d. Fixed Ratio
Answer: c. Gaining Ratio
When a partner dies, the amount of general reserve is transferred to the partners’ capital a/c in,
a. New profit sharing ratio
b. Old profit sharing ratio
c. The capital ratio
Answer: b. Old profit sharing ratio
What is Gaining Ratio?
Answer: Gaining Ratio is such type of ratio in which partners have agreed to gain their share of profit from the other partners of the firm.
Define the new profit sharing ratio.
Answer: New profit sharing ratio is the ratio by which existing partner and new partner will share profits and losses of the firm.
Explain the meaning of Sacrificing Ratio.
Answer: Sacrificing Ratio is the ratio in which the old partners agree to sacrifice their shares of profit in favour of new or incoming partner.
Pass the necessary journal entry when the Goodwill does not appear in the books.
Answer: The journal entry passed is as follows,
Goodwill a/c Dr.
To all partner’s capital a/c (in old profit sharing ratio)
How is the new profit sharing ratio mathematically stated?
Answer: New share of a partner = Old Share + Acquired Share
Pass the necessary journal entry when the Goodwill appears in the books.
Answer: The journal entry passed is,
All Partner’s capital a/c Dr.
To Goodwill a/c
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