P, Q and R are partners in a firm. If S is admitted as a new partner then: Option 1: The old firm and old partnership are dissolved Option 2: The old firm is dissolved Option 3: The old partnership is reconstituted Option 4: The old partnership firm is dissolved

Answer: The old partnership is reconstituted. Solution: When a new partner S is admitted into the firm of P, Q and R, the old partnership is reconstituted. Reconstitution of partnership means a change in the existing partnership agreement resulting in a new agreement. The partnership firm continues to exist but with a changed relationship among partners. In admission of a partner: - The old partnership agreement comes to an end - A new partnership agreement is formed with modified terms - The firm continues its operations without any break - Only the composition and profit-sharing ratio changes Dissolution vs Reconstitution: Dissolution of firm means complete closure of the business and settlement of all affairs. This does NOT happen during admission. Reconstitution means the firm continues with changed partnership terms. This is what happens during admission. Therefore, admission of a partner is a case of reconstitution, not dissolution. The firm P, Q, R & S continues as the same entity with modified partnership arrangement. The correct answer is Option 3.

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P, Q and R are partners in a firm. If S is admitted as a new partner then:

The old firm and old partnership are dissolved

The old firm is dissolved

The old partnership is reconstituted

The old partnership firm is dissolved

✅ Correct Option: 3

When a new partner S is admitted into the firm of P, Q and R, the old partnership is reconstituted.

Reconstitution of partnership means a change in the existing partnership agreement resulting in a new agreement. The partnership firm continues to exist but with a changed relationship among partners.

In admission of a partner:

The old partnership agreement comes to an end
A new partnership agreement is formed with modified terms
The firm continues its operations without any break
Only the composition and profit-sharing ratio changes

Dissolution vs Reconstitution:

Dissolution of firm means complete closure of the business and settlement of all affairs. This does NOT happen during admission.

Reconstitution means the firm continues with changed partnership terms. This is what happens during admission.

Therefore, admission of a partner is a case of reconstitution, not dissolution. The firm P, Q, R & S continues as the same entity with modified partnership arrangement.

The correct answer is Option 3.

2025: 24 May Shift 1

The accumulated profits and reserves are transferred to:

2025: 22 May Shift 2

When a new partner brings his share of goodwill in cash, the amount is credited to:

2023: 20 June Shift 2

A and B are partners sharing profits in the ratio of 2:1. C is admitted for the 1/4th share of profits, who brings Rs.20,000 as capital. After all adjustments related to goodwill, revaluation of assets and reassessment of liabilities etc, Capital of A and B are Rs.45,000 and Rs.15,000 respectively. It is agreed that partners capitals should be according to the new profit sharing ratio.

Determine the new capital of B.

2022: 23 Aug Shift 2

What would be the new Profit Sharing Ratio :

2026: 19 May Shift 1

A and B are partners. The net assets of the firm, including fictitious assets of Rs. 5,000, are Rs. 105,000. The total external liabilities of the firm are Rs. 20,000. The normal rate of return is 10% and the average profit of the firm is Rs. 12,000. The value of goodwill as per capitalization of super profit method will be :

2026: 6 June Shift 1

Match List-I with List-II

List-I	List-II
(A) Incoming partner brings goodwill in cash	(I) No entry to be passed
(B) Goodwill already exist in the books	(II) Sacrificing partners are credited with their share and new partner is debited
(C) Incoming partner does not bring goodwill in cash	(III) Amount of Premium is shared by the existing partners in the sacrificing ratio
(D) Goodwill paid privately to sacrificing partners	(IV) Write-off the goodwill in old ratio

Choose the correct answer from the options given below:

P, Q and R are partners in a firm. If S is admitted as a new partner then:

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