1. P and Q were partners sharing profits and losses in the ratio of 3 : 2. They decided that with effect from 1st January, 2019 they would share profits and losses in the ratio of 5 : 3. Goodwill is valued at ? 1,28,000. In adjustment entry :

2. X, Y and Z are partners in a firm sharing profits in the ratio 4 : 3 : 2. Their Balance Sheet as at 31-3-2019 showed a debit balance of Profit & Loss A/c ₹1,80,000. From 1-4-2019 they will share profits equally. In the necessary journal entry to give effect to the above arrangement when A Y and Z decided not to close the Profit & Loss Acccount:

3. Which of the following is NOT true in relation to goodwill?

4. Total Capital employed in the firm is ₹8,00,000, reasonable rate of return is 15% and Profit for the year is ₹12,00,000. The value of goodwill of the firm as per capitalization method would be :

5. A firm earns ₹1,10,000. The normal rate of return is 10%. The assets of the firm amounted to ₹11,00,000 and liabilities to ₹1,00,000. Value of goodwill by capitalisation of Average Actual Profits will be : (C.S. Foundation Dec., 2012)

6. Under the capitalisation method, the formula for calculating the goodwill is :

7. A and B were partners in a firm sharing profit or loss equally. With effect from 1st April 2019 they agreed to share profits in the ratio of 4 : 3. Due to change in profit sharing ratio, A’s gain or sacrifice will be :

8. When Goodwill is not purchased goodwill account can :

9. A, B and C were partners sharing profit or loss in the ratio of 7 : 3 : 2. From Jan. 1,2019 they decided to share profit or loss in the ratio of 8 : 4 : 3. Due to change in the profit-loss sharing ratio, B’s gain or sacrifice will be :

10. A, B and C were partners sharing profits and losses in the ratio of 7 : 3 : 2. From 1st January, 2019 they decided to share profits and losses in the ratio of 8:4:3. Goodwill is ₹1,20,000. In Adjustment entry for goodwill:

11. The average capital employed of a firm is ?4,00,000 and the normal rate of return is 15%. The average profit of the firm is ?80,000 per annum. If the . remuneration of the partners is estimated to be ? 10,000 per annum, then on the basis of two years purchase of super-profit, the value of the Goodwill will be :

12. Capital invested in a firm is ₹5,00,000. Normal rate of return is 10%. Average profits of the firm are ₹64,000 (after an abnormal loss of ?4,000). Value of goodwill at four times the super profits will be :

13. X Y and Z are partners sharing profits and losses in the ratio 5 : 3 : 2. They decide to share the future profits in the ratio 3 : 2 : 1. Workmen compensation reserve appearing in the balance sheet on the date if no information is available for the same will be :

14. The average profit of a business over the last five years amounted to ₹60,000. The normal commercial yield on capital invested in such a business is deemed to be 10% p.a. The net capital invested in the business is ₹5,00,000. Amount of goodwill, if it is based on 3 years purchase of last 5 years superprofits will be :

15. The net assets of a firm including fictitious assets of ₹5,000 are ₹85,000. The net liabilities of the firm are ₹30,000. The normal rate of return is 10% and the average profits of the firm are ₹8,000. Calculate the goodwill as per capitalisation of super profits.

16. Weighted average method of calculating goodwill is used when :

17. P, Q and R were partners in a firm sharing profis in 5 : 3 : 2 ratio. They decided to share the future profits in 2 : 3 : 5. For this purpose the goodwill of the firm was valued at ₹1,20,000. In adjustment entry for the treatment of goodwill due to change in the profit sharing ratio :

18. A, B and C are partner sharing profits in the ratio of 1 : 2 : 3. On 1-4-2019 they decided to share the profits equally. On the date there was a credit balance of ? 1,20,000 in their Profit and Loss Account and a balance of ? 1,80,000 in General Reserve Account. Instead of closing the General Reserve Account and Profit and Loss Account, it is decided to record an adjustment entry for the same. In the necessary adjustment entry to give effect to the above arrangement:

19. Any change in the relationship of existing partners which results in an end of the existing agreement and enforces making of a new agreement is called

20. A and B were partners in a firm sharing profit or loss equally. With effect from 1st April, 2019 they agreed to share profits in the ratio of 4 : 3. Due to change in profit sharing ratio, B’s gain or sacrifice will be :

21. Aran and Varan are partners sharing profits in the ratio of 4 : 3. Their Balance Sheet showed a balance of ? 5 6,000 in the General Reserve Account and a debit balance of ? 14,000 in Profit and Loss Account. They now decided to share the future profits equally. Instead of closing the General Reserve Account and Profit and Loss Account, it is decided to pass an adjustment entry for the same. In adjustment entry :

22. Sacrificing Ratio :

23. The profits earned by a business over the last 5 years are as follows : ₹12,000; ₹13,000; ₹14,000; ₹18,000 and ₹2,000 (loss). Based on 2 years purchase of the last 5 years profits, value of Goodwill will be :

24. The Goodwill of the firm is NOT affected by :

25. The excess amount which the firm can get on selling its assets over and above the saleable value of its assets is called :