In a partnership firm, if a partner retires, the continuing partners: MCQ with Answer and Explanation

Question

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In a partnership firm, if a partner retires, the continuing partners:

A. Revalue assets and liabilities and adjust capital

B. Distribute all assets

C. Dissolve the firm

D. Close the business

Answer: Option A

Solution (By JKSSB Mock Tests)

On retirement, the firm continues, assets and liabilities are revalued, and retiring partner's dues are settled.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Practice More Accountancy and Book Keeping Questions

Question #1

The matching concept requires that:

A. Profits should match cash

B. Assets should equal liabilities

C. Expenses should be matched with revenues of the same period

D. Debits equal credits

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Correct Answer: Option C

Explanation:
Matching principle states that expenses incurred to earn revenues should be recognized in the same accounting period.

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Question #2

A company's debt-equity ratio is 1:1. If total assets are ₹10,00,000, the amount of debt is:

A. ₹5,00,000

B. ₹2,00,000

C. ₹4,00,000

D. ₹10,00,000

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Correct Answer: Option A

Explanation:
Debt-equity 1:1 implies Debt = Equity. Total assets = Debt + Equity = 2x. So x = ₹5,00,000, hence debt ₹5,00,000.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

The primary goal of financial management is:

A. Maximising revenue

B. Maximising shareholder wealth

C. Maximising earnings per share (EPS)

D. Minimising risk

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Correct Answer: Option B

Explanation:
The prime objective is wealth maximisation, reflected in market value of shares.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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