ISC ACCOUNTS Admission of a new partner MCQs with Solved answers

ISC ACCOUNTS Admission of a new partner MCQs with Solved answers
( Question 1 to 5)

1. Investment Fluctuation reserve is created out of a firm’s profits to meet the fall in the market value of ——————–. 

(a) Investments
(b) Sharers
(c) Debentures
(d) Fixed Deposit
2. Fluctuation reserves are having a credit balance and appear in the Balance Sheet on the ———– side. 

(a) Assets
(b) Liability
(c) both (a) and (b)
(d) None of these

3. A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They admit C as a new partner for 1/4 share of profit.
Investment Fluctuation reserve ₹40,000.
Book Value of Investment ₹50,000.
The market value of Investment at the time of admission of ‘C’ ₹35,000.Journal entry pass in the books of the firm?

(a) Investment Fluctuation reserve A/c Dr. 40,000
To Investment A/c 15,000
To A’s Capital A/c 15,000
To B’s Capital A/c 10,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and Balance credited to old partner’s capital)
(b) Investment Fluctuation reserve A/c Dr. 50,000
To Investment A/c 25,000
To A’s Capital A/c 15,000
To B’s Capital A/c 10,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and Balance credited to old partner’s capital)
(c) Investment Fluctuation reserve A/c Dr. 45,000
To Investment A/c 20,000
To A’s Capital A/c 15,000
To B’s Capital A/c 10,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and Balance credited to old partner’s capital)

(d) Investment Fluctuation reserve A/c Dr. 35,000
To Investment A/c 15,000
To A’s Capital A/c 10,000
To B’s Capital A/c 10,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and Balance credited to old partner’s capital)

4. A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They admit C as a new partner for 1/4 share of profit.
Investment Fluctuation reserve ₹20,000.
Book Value of Investment ₹50,000.
The market value of Investment at the time of admission of ‘C’ ₹30,000.Journal entry pass in the books of the firm?

(a) Investment Fluctuation reserve A/c Dr. 20,000
To Investment A/c 10,000
To A’s Capital A/c 5,000
To B’s Capital A/c 5,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and Balance credited to old partner’s capital a/c)
(b) Investment Fluctuation reserve A/c Dr. 20,000
To Investment A/c 20,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve )
(c) Investment Fluctuation reserve A/c Dr. 30,000
To Investment A/c 20,000
To A’s Capital A/c 5,000
To B’s Capital A/c 5,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve )
(d) Investment Fluctuation reserve A/c Dr. 30,000
To Investment A/c 30,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve )
5. A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They admit C as a new partner for 1/4 share of profit.
Investment Fluctuation reserve ₹20,000.
Book Value of Investment ₹50,000.
The market value of Investment at the time of admission of ‘C’ ₹25,000.Journal entry pass in the books of the firm?

(a)
(i) Investment Fluctuation reserve A/c Dr. 20,000
Revaluation A/c Dr. 5,000
To Investment A/c 25,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and short fall charged to revaluation A/c)
(ii) A’s Capital A/c Dr. 3,000
B’s Capital A/c Dr. 2,000 A/c  Dr.   
  To Revaluation      A/c     5,000
(Being loss on revaluation  transferred to old partners capital A/c)           

(b)
(i) Investment Fluctuation reserve A/c Dr. 20,000
Revaluation A/c Dr. 5,000
To Investment A/c 15,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and short fall charged to revaluation A/c)
(ii) A’s Capital A/c Dr. 3,000
B’s Capital A/c Dr. 2,000 A/c  Dr.
To Revaluation      A/c     5,000
(Being loss on revaluation  transferred to old partners capitalA/c )      
(c)
(i) Investment Fluctuation reserve A/c Dr. 20,000
Revaluation A/c Dr. 15,000
To Investment A/c 5,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and short fall charged to revaluation A/c)
(ii) A’s Capital A/c Dr. 9,000
B’s Capital A/c Dr. 6,000 A/c  Dr.
To Revaluation      A/c     15,000
(Being loss on revaluation  transferred to old partners capital A/c)
(d) None of these

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Answer – Question Number 1To 5

1. Answer – (a) Investments

2.Answer – (b) Liability

3. Answer –(a)

Investment Fluctuation reserve A/c Dr. 40,000
To Investment A/c 15,000
To A’s Capital A/c 15,000
To B’s Capital A/c 10,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and Balance credited to old partner’s capital a/c)

4. Answer – (b)
Investment Fluctuation reserve A/c Dr. 20,000
To Investment A/c 20,000
(Being loss on revaluation of investment  adjusted against Investment fluctuation reserve )

5. Answer – (a)
(i) Investment Fluctuation reserve A/c Dr. 20,000
Revaluation A/c Dr. 5,000
To Investment A/c 25,000
(Being loss on revaluation of investment adjusted against Investment fluctuation reserve and short fall charged to revaluation A/c)
(ii) A’s Capital A/c Dr. 3,000
B’s Capital A/c Dr. 2,000 A/c  Dr.
To Revaluation      A/c     5,000
(Being loss on revaluation  transferred to old partners capital A/c)  

WORKMEN COMPENSATION RESERVE

ISC ACCOUNTS Admission of a new partner MCQs with Solved answers
( Question 6 to 10)

6. A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They admit C as a new partner for 1/4 share of profit.
Investment Fluctuation reserve ₹20,000.
Book Value of Investment ₹50,000.
The market value of Investment at the time of admission of ‘C’ ₹60,000.Journal entry pass in the books of the firm?

(a)
(i)Investment Fluctuation reserve A/c Dr. 40,000
To A’s Capital A/c 24,000
To B’s Capital A/c 16,000
(Investment fluctuation reserve credited to old partner’s capital A/c)
(ii) Investment  A/c Dr. 10,000
To Revaluation A/c 10,000
(Increase in the value of investment)
(iii) Revaluation A/c Dr 10,000
To A’s Capital A/c 6,000
To B’s Capital A/c 4,000
(Being Profit on revaluation  transferred to old partners capital account)
(b)
(i)Investment Fluctuation reserve A/c Dr. 60,000
To A’s Capital A/c 36,000
To B’s Capital A/c 24,000
(Investment fluctuation reserve credited to old partner’s capital A/c)
(ii) Investment  A/c Dr. 10,000
To Revaluation A/c 10,000
(Increase in the value of investment)
(iii) Revaluation A/c Dr 10,000
To A’s Capital A/c 6,000
To B’s Capital A/c 4,000
(Being Profit on revaluation  transferred to old partners capital account)

(c)
(i)Investment Fluctuation reserve A/c Dr. 50,000
To A’s Capital A/c 30,000
To B’s Capital A/c 20,000
(Investment fluctuation reserve credited to old partner’s capital A/c)
(ii) Investment  A/c Dr. 10,000
To Revaluation A/c 10,000
(Increase in the value of investment)
(iii) Revaluation A/c Dr 10,000
To A’s Capital A/c 6,000
To B’s Capital A/c 4,000
(Being Profit on revaluation  transferred to old partners capital account)

(d) None of these

7. If No Liability Or Claim Exist Against Workmen Compensation Reserve. In such a case, the entire amount of Workmen Compensation Reserve is transferred to the ——————–in their old profit-sharing ratio.

(a) Old Partner’s Capital
(b) Current Accounts
(c)  (a) Or (b)
(d) None of these
(8) If the claim is lower than the amount of Workmen Compensation Reserve. The amount of estimated claim is transferred to Provision for Workmen Compensation Claim Account and excess Workmen Reserve over the Workmen Compensation Claim is credited to old partners in their old profit sharing ratio. The journal entry is passed in the books of the firm?

(a) Workmen Compensation Reserve  A/c……….Dr.
To Provision for Workmen Compensation Claim A/c
To Old partner’s Capital/ Current A/c
(Being the provision for estimated claim made and balance transferred to Old Partner’s Capital Accounts in their old profit sharing ratio)
(b) Workmen Compensation Reserve  A/c……….Dr.
To Old partner’s Capital/ Current A/c
(Being the provision for estimated claim made and balance transferred to Old Partner’s Capital Accounts in their old profit sharing ratio)
(c) None of these

9.X and Y are partners in a firm sharing profits and losses in the ratio of 3:2. They admit Z as a new partner for 1/4 share of profit.
Workmen Compensation Reserve ₹20,000.
Provision for Workmen Compensation Claim ₹20,000. What Journal entry will be passed in the books of the firm?

(a) Workmen Compensation Reserve  A/c……….Dr. 20,000
To Provision for Workmen Compensation Claim A/c    20,000
(Being the provision for estimated claim made )

(b) Provision for Workmen Compensation Claim A/c ……….Dr. 20,000
To  Workmen Compensation Reserve  A/c   20,000
(Being the provision for estimated claim made )

(c) None of these

10.X and Y are partners in a firm sharing profits and losses in the ratio of 3:2. They admit Z as a new partner for 1/4 share of profit.
Workmen Compensation Reserve ₹20,000.
Provision for Workmen Compensation Claim ₹25,000. What Journal entry will be passed in the books of the firm?

(a) Workmen Compensation Reserve  A/c……….Dr. 25,000
To Provision for Workmen Compensation Claim A/c    25,000
(Being the provision for estimated claim made )

(b)
(i) Provision for Workmen Compensation Claim A/c ……….Dr. 20,000
Revaluation A/c Dr 5,000
To  Workmen Compensation Reserve  A/c   25,000
((Being the amount of claim debited to Workmen Compensation Reserve and Revaluation Account)
(ii) A’s Capital  A/cDr.3,000
B’s Capital  A/cDr.    2,000                        
  To Revaluation A/c 5,000
(Being the loss on Revaluation is transferred to Capital  Accounts of old partners in their old ratio)

(c)
(i) Provision for Workmen Compensation Claim A/c ……….Dr. 25,000
Revaluation A/c Dr 5,000
To  Workmen Compensation Reserve  A/c   30,000
((Being the amount of claim debited to Workmen Compensation Reserve and Revaluation Account)
(ii) A’s Capital  A/cDr.3,000
B’s Capital  A/cDr.    2,000                        
  To Revaluation A/c 5,000
(Being the loss on Revaluation is transferred to Capital  Accounts of old partners in their old ratio)

(d) None of these

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Answer – Question Number 6To 10

6. Answer – (a)
(i)Investment Fluctuation reserve A/c Dr. 40,000
To A’s Capital A/c 24,000
To B’s Capital A/c 16,000
(Investment fluctuation reserve credited to old partner’s capital A/c)
(ii) Investment  A/c Dr. 10,000
To Revaluation A/c 10,000
(Increase in the value of investment)
(iii) Revaluation A/c Dr 10,000
To A’s Capital A/c 6,000
To B’s Capital A/c 4,000
(Being Profit on revaluation  transferred to old partners capital account)

7.Answer – (c)  (a) Or (b)

8. Answer -(a)
Workmen Compensation Reserve  A/c……….Dr.
To Provision for Workmen Compensation Claim A/c
To Old partner’s Capital/ Current A/c
(Being the provision for estimated claim made and balance transferred to Old Partner’s Capital Accounts in their old profit sharing ratio)
9. Answer –(a)
Workmen Compensation Reserve  A/c……….Dr. 20,000
To Provision for Workmen Compensation Claim A/c    20,000
(Being the provision for estimated claim made )
10. Answer –(b)
(i) Provision for Workmen Compensation Claim A/c ……….Dr. 20,000
Revaluation A/c Dr 5,000
To  Workmen Compensation Reserve  A/c   25,000
((Being the amount of claim debited to Workmen Compensation Reserve and Revaluation Account)
(ii) A’s Capital  A/cDr.3,000
B’s Capital  A/cDr.    2,000                        
  To Revaluation A/c 5,000
(Being the loss on Revaluation is transferred to Capital  Accounts of old partners in their old ratio)

Admission of a new partner MCQs with Solved answer 12 cbse

ISC ACCOUNTS Admission of a new partner MCQs with Solved answers
( Question 11 to 15)

11. Varnit and Sajal were partners in a firm sharing profits and losses in the ratio of 3:2. On 1st April, 2020, Bhasker is admitted as a new partner in the firm for 1/5th share in the profits on various terms, one of them being his contribution of ₹ 50,000 as capital.
The new profit-sharing ratio amongst all the partners to be 12:8:5.
The capitals of Varnit and Sajal, after taking into account all the terms of admission were ₹ 1,38,000 and ₹ 280,000.
It is decided that the Capital Accounts of Runa and Ria be adjusted in the ratio of their respective share in the profits after admission, any surplus to be adjusted through the Current .
Account while any deficiency through the Cash Account. The surplus capital adjusted through the current account will be:
(a) Varnit’s debit capital balance of ₹ 18,000
(b) Sajal,s credit capital balance of ₹ 18,000
(c) Varnit’s Credit capital balance of ₹ 18,000
(d) Sajal,s credit capital balance of ₹ 12,000

12. A and B are partners in a firm sharing profits and losses: A 75% and B25%. They admit C as a new partner for 1/4 share of profit.
Workmen Compensation Reserve ₹15,000.
The liability on Workmen Compensation Reserve is determined at ₹ 13,000.
At the time of C’s admission, the Workmen Compensation Reserve of:
(a) ₹ 15,000 will be credited to the capital accounts of all the partners
(b) ₹ 13,000 will be credited to the capital accounts of all the partners.
(c) ₹ 2,000 will be credited to the capital accounts of the old partners.
(d) ₹ 2,000 will be debited to the capital accounts of the old partners.

13. A and B are partners sharing profits in the ratio of 2 : 3. Their balance sheet shows machinery at₹ 4,00,000; stock at₹ 1,60,000 and Debtors at₹ 3,20,000. C is admitted and new profit sharing ratio is agreed at 6 : 9 : 5. Machinery is revalued at₹ 3,40,000 and a provision is made for doubtful debts @ 2.5%. A’s share in loss on revaluation amount to ₹ 20,000. Revalued value of stock will be–
(a)₹ 1,78,000
(b) ₹1,68,000
(c)₹ 60,000
(d) ₹62,000

14. A and B are partners sharing profit in the ratio of 5:3 with capital of ₹ 90,000 and ₹ 80,000 respectively. They admit a new partner C. The new profit sharing ratio of A, B and C is 5:3:2 respectively. C brings ₹ 40,000 as capital.
The profit on revaluation of assets and reassessment of liabilities is ₹ 24,000. it is agreed that capitals of the partner’s should be in the new profit sharing ratio. (i) A’s new capital Will be?
(a) ₹1,00,000
(b) ₹ 60,000
(c) ₹40,000
(d) ₹1.05,000

(ii) A’s new capital Will be?
(a) ₹80,000
(b) ₹60,000
(c) ₹40,000
(d) ₹89,000

15. Sanjay and Vijay are partners sharing profit in the ratio of 3:2. The capital accounts of Sanjay and Vijay show the balance after all adjustments and revaluation as ₹ 80,000 and ₹ 70,000 respectively.
They admit Ajay as a new partner for 1/4 share in the profits. Ajay’s share of capital will be?

(a)  ₹ 37,500
(b) ₹ 60,000
(c)₹ 50,000
(d) None of these

Answer – Question Number 11To 15

11. Answer – (c) Varnit’s Credit capital balance of ₹ 18,000
12. Answer – (c) ₹ 2,000 will be credited to the capital accounts of the old partners.
13. Answer – (a)₹ 1,78,000
14. Answer –

(i) (a) 1,00,000
(ii) (b) 60,000

15. Answer –(c)₹ 50,000

ISC ACCOUNTS 12 Admission of a new partner MCQs with Solved answers