Accounts - Principles of Accounts Questions
Question 206:
Goodwill can be valued in partnership when?
- A A partners make profits
- B Large losses are made
- C A partner retires
- D A new branch is opened
Question 207:
As part of the initial investment, a partner contributes office equipment that originally cost N20,000 and on which provision for depreciation of N12,500 had been recorded. If the partners agree on a valuation of N9,000 for the equipment, what amount should be debited to the office equipment account?
- A N7,500
- B N9,000
- C N12,500
- D N20,000
Question 208:
When a partner makes a drawing of stock items from a partnership, the accounting impact of the drawing is to increase the partner's?
- A Goodwill account balance
- B Current account credit balance
- C Current account debit balance
- D Profit and loss credit balance
Question 209:
Dele and Seun who are in partnership, have decided to covert their business into a limited liability company where both become directors. To convert the business?
- A They will simply continue since there are no new members
- B The partnership is formally ended and new company books opened
- C The shares and all other items will be shared equally and not in their former ratios
- D Computation of goodwill must be done as it is legally required
Question 210:
If a sole proprietorship is purchased for cash, then?
- A The purchaser debits his business purchase account with the consideration he pays
- B All assets and liabilities must be bought
- C Goodwill results where value of assets
- D The vendor debits his business purchase account with the considerstion he receives