200 Important MCQs of Dissolution of a Partnership Firm Accountancy class 12
Looking for important MCQs of Dissolution of a partnership firm chapter with answers and explanations of Accountancy class 12 CBSE, ISC, and other state Boards.
Multiple Choice Questions of Dissolution of a Partnership Firm chapter with answers of Class 12 Accountancy
Let’s Practice.
Which of the following is not the mode of dissolution of the firm?
a) By Mutual Agreement
b) On happening of an event
c) Dissolution by court
d) Retirement of a partner
Ans:- d)
In which condition a partnership firm is deemed to be dissolved?
(a) On a partner’s admission
(b) On retirement of a partner
(c) On expire of the period of partnership
(d) On loss in partnership
Ans:- (c)
Court can make an order to dissolve the firm when:
(a) Some partner has become fully mad
(b) Partnership deed is fully followed
(c) Continued future profits are expected
(d) Firm is running legal business
Ans:- (a)
Rama, a partner took Machinery of ₹ 50,000 in settlement of her Loan of ₹ 60,000. Machinery was already transferred to Realisation Account. How Realisation Account will be affected?
(a) Realisation Account will be credited by ₹ 60,000
(b) Realisation Account will be debited by ₹ 60,000
(c) Realisation Account will be credited by ₹ 50,000
(d) No effect on Realisation Account
Ans:- (a)
At the time of dissolution, Loan to Partner is
(a) transferred to Realisation Account
(b) transferred to Partner’s Capital Account
(c) transferred to Partner’s Current Account
(d) received from the partner
Ans:- (b)
On dissolution of a firm, realisation account is debited with
(a) All assets to be realised
(b) All outside liabilities of the firm
(c) Cash received on sale of assets
(d) Any assets taken over by one of the partners
Ans:- (a)
On dissolution of a firm, out of the proceeds received from the sale of assets _ will be paid first of all.
(a) Partner’s Capital
(b) Partner’s Loan to Firm
(c) Partner’s additional capital
(d) Outside Creditors
Ans:- (d)
At the time of dissolution, if it not given whether loan to partner is received or not, Loan to Partner is
(a) transferred to Realisation Account.
(b) transferred to Partner’s Capital Account.
(c) transferred to Partner’s Current Account.
(d) received from the partner
Ans:- (b)
Dada, Yuvi and Viru were partners sharing profits and losses in the ratio of 3 : 2 : 1. Their books showed Workmen Compensation Reserve of ₹ 1,00,000. Workmen Claim was ₹ 60,000. How it will affect the books of accounts at the time of dissolution of firm?
(a) ₹ 40,000 will be distributed among partners.
(b) ₹ 1,00,000 will be credited to Realisation Account and ₹ 60,000 will be paid.
(c) ₹ 60,000 will be credited to Realisation Account and will be paid. Balance ₹ 40,000 will be distributed among partners.
(d) ₹ 60,000 will be credited to Realisation Account and will be even paid.
Ans:- (c)
At the time of dissolution of firm, “Loan of partners” (Loans given by partners to the firm) is paid out of the amount realised on sale of assets:
(a) After making the payment of loans given by third party
(b) After making the payment of balance of Capital Accounts of partners
(c) After making the payment of above (A) and (B)
(d) Before the payment of loans given by third party
Ans:- (a)
At the time of dissolution of firm, at which state the balance of partner’s capital accounts is paid?
(a) After making the payment to third party’s loans
(b) Before making the payment of partners in respect of their loans
(c) After making the payment to third party for their loans as well as partners loans
(d) None of the above
Ans:- (c)
On firm’s dissolution, which one of the following account should be prepared at the last?
(a) Realisation Account
(b) Partner’s Capital Accounts
(c) Cash Account
(d) Partner’s Loan Accounts
Ans:- (c)
At the time of dissolution, Harry, a creditor of the firm agreed to take over the furniture of the book value of ₹ 1,00,000 at ₹ 89,000 and the balance in cash in full settlement of his account of ₹ 1,10,000.
Which journal entry will be passed for the balance to be paid in cash?
(a)
Realisation A/c Dr. 35,000
To Bank A/c 35,000
(b)
Realisation A/c Dr. 21,000
To Bank A/c 21,000
(c)
Realisation A/c Dr. 11,000
To Bank A/c 11,000
(d)
Realisation A/c Dr. 15,000
To Bank A/c 15,000
Ans:- (b)
In the event of dissolution of a partnership firm, the provision for doubtful debts is transferred to:
(a) Realisation Account
(b) Partners Capital Accounts
(c) Sundry Debtors Account
(d) None of the above
Ans:- (a)
At the time of dissolution of firm, balances of Partner’s Capital Account are paid
(a) After Payment of Outsider’s Liabilities
(b) Before payment of loan by partner
(c) After payment of outsiders’ Liabilities and Partner’s Loan
(d) Before payment of Outside Liabilities
Ans:- (c)
Unrecorded liability, when paid on dissolution of a firm is debited to:
(a) Partner’s Capital A/cs
(b) Realisation A/c
(c) Liabilities A/c
(d) Assets A/c
Ans:- (b)
On dissolution of a partnership firm, profit or loss on realisation is distributed among the partners
(a) In capital ratio
(b) In Profit sharing ratio
(c) Equally
(d) None of the above
Ans:- (b)
On the day of dissolution of the firm ‘Roop Brothers’ had partner’s capital amounting to ₹ 1,50,000, external liabilities ₹ 35,000, cash balance ₹ 8,000 and Profit & Loss Account (Dr.) ₹ 7,000. If realisation expense and loss on realisation amounted to ₹ 5,000 and ₹ 25,000 respectively, the amount realised by sale of assets is
(a) ₹ 1,64,000
(b) ₹ 1,45,000
(c) ₹ 1,57,000
(d) ₹ 1,50,000
Ans:- (d)
Manoj and Sanjeev are partners in a firm sharing profits and losses in the ratio of 2 : 3. They decide to dissolve the firm. on the date of dissolution of the firm, Manoj’s loan to the firm was ₹ 75,000 whereas Manoj’s wife’s loan was ₹ 90,000. Amount available with the firm is ₹ 60,000. How this amount will be paid?
(a) ₹ 60,000 to Manoj’s Wife’s Loan
(b) In the ratio of 2 : 3
(c) In the ratio of 5 : 6
(d) In the ratio of 1 : 1
Ans:- (a)
On dissolution of the firm amount received from sale of unrecorded asset is credited to:
(a) Partner’s Capital Accounts
(b) Profit and Loss Account
(c) Realisation Account
(d) Cash Account
Ans:- (c)
Realisation A/c is a :
(a) Nominal A/c
(b) Real A/c
(c) Personal A/c
(d) Real A/c as well as Personal A/c
Ans:- (a)
At the time of dissolution of firm, Loan given by partner to the firm is paid out of the amount realised on sale of assets
a) after payment of outside liabilities but before repayment of capital.
b) after payment of capital of partners
c) after payment of outside liabilities or capital
d) before payment of outside liabilities
Ans:- a)
In the event of dissolution of firm, the partner’s personal assets are first used for payment of the :
(a) Firm’s liabilities
(b) The personal liabilities
(c) None of the two
(d) Any of the two
Ans:- (b)
A partnership firm is compulsorily dissolved :
(a) When the business of the firm is declared illegal
(b) When a partner of the firm dies
(c) When a partner of the firm becomes insolvent
(d) When a partner transfers his share to some other person without the consent of other partners.
Ans:- (a)
In the event of dissolution of a partnership firm, Provision for Doubtful Debts is transferred to
(a) Realisation Account
(b) Partners’ Capital Accounts
(c) Sundry Debtors Account
(d) Partners’ Current Accounts
Ans:- (a)
Anita, Benu and Chitra dissolve their partnership firm. Anita had taken a loan of ₹ 10,000 from the firm. What will be the entry to settle Anita’s Loan on the dissolution of the firm?
(a) Debit Realisation A/c; Credit Anita’s Loan A/c
(b) Debit Anita’s Loan A/c; Credit Realisation A/c
(c) Debit Anita’s Capital A/c; Credit Anita’s Loan A/c
(d) Debit Bank A/c; Credit Anita’s Loan A/c
Ans:- (c)
On dissolution, goodwill account is transferred to:
(a) In the Capital Accounts of Partners
(b) On the credit of Cash Account
(c) On the Debit of Realisation Account
(d) On the Credit of Realisation Account
Ans:- (c)
At the time of dissolution of partnership firm, fictitious assets are transferred to:
(a) Capital Accounts of Partners
(b) Realisation Account
(c) Cash Account
(d) Partner’s Loan Account
Ans:- (a)
Anita and Binita are partners in a firm. Anita had taken a loan of ₹ 1,00,000 from the firm. She paid ₹ 60,000 by cheque. How will Anita’s Loan Account be closed on dissolution of the firm?
(a) By crediting Bank A/c by ₹ 60,000 and Anita’s Capital A/c by ₹ 40,000.
(b) By debiting Bank A/c by ₹ 60,000 and crediting Anita’s Capital A/c by ₹ 40,000
(c) by debiting Bank A/c by ₹ 60,000 and Anita’s Capital A/c by ₹ 40,000.
(d) By debiting Bank A/c by ₹ 60,000 and Realisation A/c by ₹ 40,000.
Ans:- (c)
At time of dissolution of partnership firm, the amount of ‘Bills Payable’ shown in the liability side of Balance Sheet is transferred to:
(a) Capital Accounts of partners
(b) Realisation Account
(c) Cash Account
(d) Loan Account of partners
Ans:- (b)
On dissolution, the final balance of capital accounts are transferred to:
(a) Realisation Account
(b) Cash Account
(c) Profit & Loss Account
(d) Loan Account of Partners
Ans:- (b)
When a partnership firm dissolves, its losses including deficiencies of capital are to be paid first
(a) out of profits of the firm
(b) out of capitals of the partners
(c) by the partners individually in their profit-sharing ratio
(d) from the proceeds of sale of assets
Ans:- (d)
At the time of dissolution of firm, at what stage the balances of partner’s Capital Accounts are paid?
a) After payment of outsider’s liabilities
b) Before payment of loan by partner
c) After payment of outsiders’ liabilities and Partners’ loan
d) Before payment of outside liabilities
Ans:- c)
Change in the existing agreement between the partners is called:
(a) Dissolution of Firm
(b) Dissolution of Partnership
(c) Dissolution of Business
(d) All of the above
Ans:- (b)
On dissolution of a firm, a partner paid ₹ 700 for firm’s realisation expenses. Which account will be debited?
(a) Cash Account
(b) Realisation Account
(c) Capital Account of the Partner
(d) Profit & Loss A/c
Ans:- (b)
On dissolution, if a pertner pays firm’s liability which of the following account is debited?
a) Profit and Loss Account
b) Realisation Account
c) Partner’s Capital Account
d) Cash Account
Ans:- b)
Amount received from sale of unrecorded asset at the time of dissolution of the firm is credited to
a) Partner’s Capital Account
b) Profit and Loss Account
c) Realisation Account
d) Cash Account
Ans:- c)
On the dissolution of a partnership firm, there were debtors of ₹ 34,000. Debtors of ₹ 1,000 became bad and 60% was realised from the remaining debtors. Which account will be debited and by how much amount on the realisation from debtors?
(a) Realisation A/c by ₹ 33,000
(b) Profit & Loss A/c by ₹ 1,000
(c) Cash A/c by ₹ 19,800
(d) Debtors A/c by ₹ 14,200
Ans:- (c)
On taking responsibility of payment of realisation expenses by a partner, the account credited will be:
(a) Realisation Account
(b) Cash Account
(c) Capital Account of the Partner
(d) None of the above
Ans:- (c)
On dissolution of firm, loss calculated in realisation account is debited/credited to which account?
(a) Cash Account (Credit)
(b) Partner’s Capital Accounts (Debit)
(c) Partner’s Capital Accounts (Credit)
(d) Realisation Account (Debit)
Ans:- (b)
On firm’s Dissolution, firm had Patents of ₹ 1,00,000, which were sold for ₹ 40,000. Realised amount will be credited to
(a) Cash A/c
(b) Realisation A/c
(c) Profit & Loss A/c
(d) Patents A/c
Ans:- (b)
Which of the following is transferred to Realisation Account :
(a) Balance of Cash Account
(b) Balance of Profit & Loss Account
(c) Amount realised on sale of assets
(d) Reserves
Ans:- (c)
Which of the following is not transferred to Realisation Account :
(a) Balance of Cash Account
(b) Balance of Reserves
(c) Balance of Profit & Loss Account
(d) All of the above
Ans:- (d)
On taking responsibility of payment of a liability of ₹ 50,000 by a partner, the account credited will be:
(a) Realisation Account
(b) Cash Account
(c) Capital Account of the Partner
(d) Liability Account
Ans:- (c)
On the basis of following data, what final payment to a partner on firm’s dissolution will be made Debit balance of Capital Account ₹ 14,000. Share of his profit on realisation ₹ 43,000; Firm’s asset taken by him for ₹ 17,000.
(a) ₹ 31,000
(b) ₹ 29,000
(c) ₹ 12,000
(d) ₹ 60,000
Ans:- (c)
At the time of dissolution of a firm, its Balance Sheet showed debtors of ₹ 60,000 and Provision for Doubtful Debts of ₹ 2,000.
What is the amount realised from the debtors, if ₹ 5,000 of the debtors prove bad and the remaining debtors are realised at a discount of 20%?
(a) ₹ 42,400
(b) ₹ 46,400
(c) ₹ 48,000
(d) ₹ 44,000
Ans:- (d)
At the time of dissolution of a firm, the total assets were ₹ 6,00,000 and outside liabilities were ₹ 2,40,000. If assets realised ₹ 7,20,000 and realisation expenses of ₹ 8,000 were paid, the profit or loss on realisation will be:
(a) Loss ₹ 1,20,000
(b) Profit ₹ 1,20,000
(c) Loss ₹ 1,12,000
(d) Profit ₹ 1,12,000
Ans:- (d)
At the time of firm’s dissolution, if realised value of intangible asset is not given, the realised value will be taken as
(a) Book Value
(b) Market Value
(c) Nil
(d) None of these
Ans:- (c)
At the time of dissolution Machinery appears at ₹ 10,00,000 and accumulated depreciation for the machinery appears at ₹ 6,00,000 in the balance sheet of a firm. This machine is taken over by a creditor of ₹ 5,40,000 at 5% below the net value. The balance amount of the creditor was paid through bank. By what amount should the bank account be credited for this transaction?
(a) ₹ 60,000
(b) ₹ 1,60,000
(c) ₹ 5,40,000
(d) ₹ 4,00,000
Ans:- (b)
In which condition a partnership is considered to be dissolved.
(a) The lunacy of partner
(b) The business of the firm becomes illegal
(c) When there is a change in profit sharing ratio
(d) When all the partners become insolvent
Ans:- (c)
At the time of Dissolution of a partnership firm, if a partner’s loan to the firm is discharged by giving an unrecorded asset, which of the following entries will be passed?
(a)
Partner’s Loan A/c Dr.
To Unrecorded Asset A/c
(b)
Unrecorded asset A/c Dr.
To Revaluation A/c
(c)
Partner’s Loan A/c Dr.
To Realisation A/c
(d)
Unrecorded asset A/c Dr.
To Revaluation A/c
Ans:- (c)
Cash balance shown in the Balance Sheet is shown on dissolution of firm in :
(a) Realisation Account
(b) Cash Account
(c) Capital Account
(d) None of the Account
Ans:- (b)
On Firm’s dissolution, on realisation of goodwill (which was shown in Balance Sheet) will be credited to:
(a) Cash A/c
(b) Realisation A/c
(c) Profit & Loss A/c
(d) None of the A/c
Ans:- (b)
On the dissolution of the firm, partner Rex agreed to take over the responsibility of completing the dissolution work at an agreed remuneration of ₹ 1,000 and to bear all realisation expenses. The actual realisation expenses amounted to ₹ 1,300 which were paid by the firm on Rex’s behalf.
What amount will be debited by the firm to the Realisation Account?
(a) ₹ 1,000
(b) ₹ 2,300
(c) ₹ 1,300
(d) ₹ 300
Ans:- (a)
On Dissolution, Goodwill Account is transferred to
a) In the capital Accounts of Partners
b) On the credit of Cash Account
c) On the debit of Realisaiton Account
d) On the credit of Reasliation Account
Ans:- c)
At the time of Dissolution of a partnership firm, if the Realisation expenses are supposed to be borne by partner ‘A’ but are paid by another partner ‘B’. Which of the following entries will be passed?
(a)
A’s Capital A/c Dr.
To B’s Capital A/c
(b)
Realisation A/c Dr.
To A’s Capital A/c
(c)
Realization A/c Dr.
To B’s Capital A/c
(d)
B’s Capital A/c
To Bank A/c
Ans:- (a)
On dissolution of a firm, its Balance Sheet revealed total creditors ₹ 50,000; Total Capital ₹ 48,000; Cash Balance ₹ 3,000. Its assets were realised at 12% less. Loss on realisation will be:
(a) ₹ 6,0000
(b) ₹ 11,760
(c) ₹ 11,400
(d) ₹ 3,600
Ans:- (c)
On dissolution, when a partner takes over an unrecorded asset, _ is credited.
(a) Capital Account of the partner
(b) Cash Account
(c) Asset Account
(d) Realisation Account
Ans:- (d)
On firm’s dissolution, when a partner voluntarily gives his personal asset to firm’s creditor as payment, the account credited will be:
(a) Realisation A/c
(b) Partner’s Capital A/c
(c) Cash A/c
(d) None of the A/c
Ans:- (b)
At the time of dissolution of partnership firm, Deferred Revenue Expenditure (Advertisement) Expenditure) is transferred to
a) Capital Account of Partners
b) Realisation Account
c) Cash Account
d) Loan by Partner Account
Ans:- a)
On the basis of the following data, final payment to a partner on firm’s dissolution will be: Credit balance of Capital Account of the partner was ₹ 50,000. Share of loss on realisation was ₹ 10,000. Firm’s liability taken over by him was for ₹ 8,000.
(a) ₹ 32,000
(b) ₹ 48,000
(c) ₹ 40,000
(d) ₹ 52,000
Ans:- (b)
On dissolution, when a partner takes over an asset _ is debited.
(a) Realisation Account
(b) Partner’s Capital Account
(c) Cash Account
(d) Asset Account
Ans:- (b)
In case of dissolution, assets are transferred to Realisation Account :
(a) At Book value
(b) At Market Value
(c) Cost or Market Value, whichever is lower
(d) None of the above
Ans:- (a)
On dissolution of the firm of Ramesh, Suresh and Naresh, Naresh had agreed to bear all realisation expenses for which he was to be paid ₹ 14,500. Actual expenses on realisation amounted to ₹ 11,000 which were paid by Naresh. The amount to be credited to Naresh’s capital account will be:
(a) ₹ 11,000
(b) ₹ 3,500
(c) ₹ 14,500
(d) ₹ 25,500
Ans:- (c)
On dissolution of partnership firm, furniture appearing in the Balance Sheet was ₹ 2,00,000. 50% of the furniture was taken over by a partner at ₹ 65,000 and balance 50% was sold at 20% less than the book value. The amount debited to bank account was:
(a) ₹ 1,45,000
(b) ₹ 80,000
(c) ₹ 65,000
(d) ₹ 1,85,000
Ans:- (b)
On the day of dissolution of the firm ‘Roop Brothers’ had partner’s capital amounting to ₹ 1,50,000, external liabilities ₹ 35,000, Cash balance ₹ 8,000 and P & L A/c (Dr.) ₹ 7,000. If realisation expenses and loss on Realisation amounted to ₹ 5,000 and ₹ 25,000 respectively, the amount realised by sale of assets is:
(a) ₹ 1,64,000
(b) ₹ 1,45,000
(c) ₹ 1,57,000
(d) ₹ 1,50,000
Ans:- (d)
At the time of dissolution of a firm, Creditors are ₹ 70,000; Firm’s Capital is ₹ 1,20,000; Cash Balance is ₹ 10,000. Other assets realised ₹ 1,50,000. Gain/Loss in the Realisation Account will be
(a) ₹ 30,0000 (Gain)
(b) ₹ 40,000 (Gain)
(c) ₹ 40,000 (Loss)
(d) ₹ 30,000 (Loss)
Ans:- (d)
At the time of dissolution of a firm, firm’s total assets were ₹ 5,00,000, creditors were ₹ 1,00,000. Realisation expenses amounted to ₹ 10,000. Assets realised 20% more than the book value and creditors were paid 5% less. Gain/loss on realisation will be
(a) Gain ₹ 95,000
(b) Loss ₹ 75,000
(c) Gain ₹ 4,95,000
(d) Loss ₹ 1,00,000
Ans:- (a)
On dissolution, the balance of a partner’s Capital account appearing on the assets side of a balance sheet is transferred to:
(a) On the Debit of Realisation Account
(b) On the Credit of Realisation Account
(c) On the Debit of Partner’s Capital Account
(d) On the Credit of Cash Account
Ans:- (c)
There was an unrecorded asset of ₹ 2,000 which was taken over by a partner at ₹ 1,500. Partner’s Capital Account will be debited by _.
(a) ₹ 2,000
(b) ₹ 1,500
(c) ₹ 500
(d) ₹ 3,500
Ans:- (b)
At the time of dissolution of a firm, Creditors are ₹ 70,000; Firm’s Capital is ₹ 1,20,000; Cash Balance is ₹ 10,000. Other assets realised ₹ 1,50,000. Gain/Loss in the realisation account will be:
(a) ₹ 30,000 (Gain)
(b) ₹ 40,000 (Gain)
(c) ₹ 40,000 (Loss)
(d) ₹ 30,000 (Loss)
Ans:- (d)
Mita and Rita decided to dissolve their partnership firm. Their books showed Goodwill of ₹ 5,000.
(a) By transferring ₹ 5,000 to the debit side of Partner’s Capital Account
(b) By transferring ₹ 5,000 to the credit side of Partner’s Capital Account
(c) By transferring ₹ 5,000 to the debit side of the Realisation Account
(d) By transferring ₹ 5,000 to the credit side of the Realisation Account
Ans:- (c)
Realisation Expenses, ₹15,000 were paid by the firm on behalf of a partner. The Journal Entry passed will be:
a) Realisation A/c Dr. 15,000
To Cash/Bank A/c 15,000
b) Realiastion A/c Dr. 15,000
To Concerned Partner’s Capital A/c 15,000
c) Concerned Partner’s Capital A/c Dr. 15,000
To Cash/Bank A/c 15,000
d) Cash/Bank A/c Dr. 15,000
To Realisation A/c 15,000
Ans:- c)
Rohan, Mohan and Sohan were partners sharing profits equally. At the time of dissolution of the partnership firm, Rohan’s loan to the firm will be
a) Credited to Rohan’s Capital Account
b) Debited to Realisation Account
c) Credited to Realisation Account
d) Credited to Bank Account
Ans:- d)
On dissolution of a firm, an unrecorded furniture of the value of ₹ 5,000 was taken up by a partner for ₹ 4,300. Which Account will be credited and by how much amount?
(a) Cash Account by ₹ 4,300
(b) Realisation Account by ₹ 700
(c) Partner’s Capital Account by ₹ 5,000
(d) Realisation Account by ₹ 4,300
Ans:- (d)
On the basis of following data, final payment to a partner on firm’s dissolution will be made:
Debit balance of Capital Account ₹ 14,000; Share of his profit on realisation ₹ 43,000; Firm’s asset taken over by him for ₹ 17,000.
(a) ₹ 31,000
(b) ₹ 29,000
(c) ₹ 12,000
(d) ₹ 60,000
Ans:- (c)
Which of the following is transferred to Realisation Account?
a) Balance of Cash Account
b) Balance of Reserves
c) Balance of Profit and Loss Account
d) Patents Account
Ans:- d)
When a partnership firm dissolves, its losses including deficiencies of capital, are to be paid first out of:
(a) The Capitals of the partners
(b) The Profits of the partners
(c) From the partners individually in their profit sharing ratio
(d) From the proceeds from sale of assets
Ans:- (b)
____________ is prepared at the time of dissolution.
(a) Revaluation Account
(b) Profit & Loss Account
(c) Profit and Loss Appropriation Account
(d) Realisation Account
Ans:- (d)
On dissolution of the firm, Partners’ Capital Account are closed through
(a) Realisation Account
(b) Drawings Account
(c) Bank Account
(d) None of these
Ans:- (c)
On dissolution of the partnership firm of A, B and C, accumulated profits of ₹ 4,00,000 will be transferred to which of the following account?
(a) Revaluation Account
(b) Realisation Account
(c) Partners’ Capital Accounts
(d) Bank Account
Ans:- (c)
While transferring assets to realisation account _ is omitted to be transferred.
(a) Patents
(b) Goodwill
(c) Cash
(d) Investments
Ans:- (c)
On the date of dissolution, the firm had debtors amounting to ₹ 3,00,000 and provision for doubtful debts of ₹ 30,000. Debtors for ₹ 20,000 proved bad and the remaining debtors realised 905. Amount realised from the debtors will be:
(a) ₹ 3,00,000
(b) ₹ 2,25,000
(c) ₹ 2,80,000
(d) ₹ 2,52,000
Ans:- (d)
On firm’s Dissolution, Patents realised at ₹40,000, State which account will be credited.
a) Cash A/c
b) Realisation A/c
c) Profit and Loss A/c
d) Patents A/c
Ans:- b)
P, a partner, is to bear all expenses of realisation for which he is to be paid ₹ 2,000. P had to pay realisation expenses of ₹ 2,500. How much amount will be debited to Realisation Account?
(a) ₹ 500
(b) ₹ 2,500
(c) ₹ 4,500
(d) 2,000
Ans:- (d)
Investments valued ₹ 2,00,000 were not shown in the books. One of the creditors took over these investments in full satisfaction of his debt of ₹ 2,20,000. How much amount will be deducted from creditors?
(a) ₹ 20,000
(b) ₹ 2,20,000
(c) ₹ 4,20,000
(d) ₹ 2,00,000
Ans:- (b)
At the time of dissolution, if realised value of tangible asset is not given, it will be taken as realised at.
(a) Nil
(b) Book Value
(c) Market Value
(d) None of these
Ans:- (b)
Avaya, Mitansh and Praveen were partners in a firm. On 31st March, 2023, the firm was dissolved. Creditors took over furniture of book value of ₹ 50,000 at ₹ 45,000 in part settlement of their amount of ₹ 60,000. The balance amount was paid to them through cheque. The amount paid through cheque will be
Ans:- (d)
If creditors are ₹ 25,000, capitals is ₹ 1,50,000 and cash balance is ₹ 10,000, what will be the amount of sundry assets?
(a) ₹ 1,75,000
(b) ₹ 1,85,000
(c) ₹ 1,65,000
(d) ₹ 1,40,000
Ans:- (c)
If opening capitals of partners are A ₹ 3,00,000, B ₹ 2,00,000 and C ₹ 1,00,000 and their drawings during the year are A ₹ 50,000, B ₹ 40,000 and C ₹ 30,000 and creditors are 60,000, What will be the amount of assets of the firm?
(a) ₹ 5,40,000
(b) ₹ 4,20,000
(c) ₹ 4,80,000
(d) ₹ 6,60,000
Ans:- (a)
Lata, Mehu and Namita were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decided to dissolve the firm on 31st March, 2023. Creditors took over stock of book value of ₹ 80,000 at 80%, in part settlement of their amount of ₹ 90,000. The balance amount was paid to the creditors by cheque. The amount paid by cheque to the creditors will be
(a) ₹ 26,000
(b) ₹ 64,000
(c) ₹ 80,000
(d) ₹ 1,44,000
Ans:- (a)
State the order of payment of the following on dissolution of partnership firm.
(i) To each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e., Partner’s Loan);
(ii) To each partner proportionately what is due to him on account of capital; and
(iii) For the debts of the firm to the outside parties.
(a) (i), (iii), (ii)
(b) (ii), (iii), (i)
(c) (i), (ii), (iii)
(d) (iii), (i), (ii)
Ans:- (d)
If total assets of a firm are ₹ 12,00,000 and total liabilities are ₹ 2,40,000, What will be the capitals of P, Q and R if they share profits in the ratio of their capitals and profit sharing ratio is 1 : 2 : 3.
(a) P ₹ 4,80,000; Q ₹ 3,20,000; R ₹ 1,60,000
(b) P ₹ 1,60,000; Q ₹ 3,20,000; R ₹ 4,80,000
(c) P ₹ 2,00,000; Q ₹ 4,00,000; R ₹ 6,00,000
(d) P ₹ 6,00,000; Q ₹ 4,00,000; R ₹ 2,00,000
Ans:- (b)
On dissolution of a firm a partner’s capital account has a credit balance of ₹ 42,000. His share of profit in realisation account is ₹ 9,000. He has paid firm’s realisation expenses ₹ 3,000. He will finally get a payment of:
(a) ₹ 39,000
(b) ₹ 42,000
(c) ₹ 54,000
(d) ₹ 48,000
Ans:- (c)
On the basis of the following data, how much final payment will be made to a partner on firm’s dissolution? Credit balance of Capital Account of the partner was ₹50,000. Share of loss on realisation amounted to ₹10,000. Firm’s liability taken over by him was for ₹8,000.
a) ₹32,000
b) ₹48,000
c) ₹40,000
d) ₹52,000
Ans:- b)
On dissolution of a firm, an unrecorded furniture of ₹5,000 was taken by a partner for ₹43,00 against payment. Which account will be credited and by how much amount?
a) Cash Account by ₹43,00
b) Realisation Account by ₹700
c) Partner’s Capital Account by ₹5,000
d) Realisation Account by ₹4,300
Ans:- d)
On dissolution of firm, which item is debited to the realisation account?
(a) Realisation expenses paid by partner
(b) Balance of reserve fund
(c) Amount of unrecorded asset
(d) Creditor’s balance shown in the Balance Sheet
Ans:- (a)
At the time of dissolution of a firm, Creditors are ₹ 70,000; Partner’s Capital is ₹ 1,20,000; Cash Balance is ₹ 10,000. Other assets realised ₹ 1,50,000. Profit/Loss in the realisation account will be:
(a) ₹ 60,000 (Loss)
(b) ₹ 80,000 (Profit)
(c) ₹ 40,000 (Loss)
(d) ₹ 30,000 (Loss)
Ans:- (d)
On dissolution of the firm sundry assets were of ₹ 1,17,000. Mohan took part of sundry assets at ₹ 72,000 (being 10% less than the book value). Sohan took remaining sundry assets at 80% of the book value. Realisation Account is to be credited with
(a) ₹ 1,01,600
(b) ₹ 1,08,000
(c) ₹ 72,000
(d) ₹ 84,000
Ans:- (a)
Creditors in Balance Sheet before dissolution were ₹ 2,50,000. Half of the creditors accepted furniture of ₹ 1,50,000 at 10% less than the book value in full settlement of their claims. Remaining creditors were paid availing discount of 5%. Amount that will be debited in the Realisation Account for payment to creditors will be
(a) ₹ 1,18,750
(b) ₹ 1,35,000
(c) ₹ 1,28,750
(d) ₹ 1,25,000
Ans:- (a)
On dissolution of a firm, debtors ₹ 17,000 were shown in the Balance sheet. Out of this ₹ 2,000 became bad. One debtor became insolvent. 70% were recovered from him out of ₹ 5,000. Full amount was recovered from the balance debtors. On account of this item, loss in realisation account will be:
(a) 5,100
(b) ₹ 1,500
(c) ₹ 3,500
(d) ₹ 2,000
Ans:- (c)
X, Y and Z are partners in a firm in the ratio of 4 : 3 : 2. On firm’s dissolution, firm’s total assets are ₹ 70,000, creditors are ₹ 15,000. Realisation expenses are ₹ 2,100. Assets realised 15% more than the book-value. Creditors were paid 20% more. for profit/loss on realisation. Y’s Capital account will be debited/credited with.
(a) Credit ₹ 8,100
(b) Credit ₹ 2,700
(c) Debit ₹ 2,700
(d) Debit ₹ 2,400
Ans:- (b)
On dissolution of a partnership firm, if realisation expenses are paid by the firm on behalf of a partner, then such expenses are debited to which of the following account
(a) Realisation Account
(b) Partner’s Capital Account
(c) Partner’s Loan Account
(d) Bank Account
Ans:- (b)
On the basis of following data, what final payment to a partner on firm’s dissolution will be made: Debit balance of capital Account ₹14,000. Share of his profit on realisation ₹43,000; Firm’s asset taken by him for ₹17,000.
a) ₹31,000
b) ₹29,000
c) ₹12,000
d) ₹60,000
Ans:- c)
On dissolution of a firm, firm’s Balance Sheet total is ₹ 77,000. On the assets side of the Balance Sheet items were shown preliminary expenses ₹ 2,000. Profit & Loss Account (Debit) Balance ₹ 4,000 and Cash Balance ₹ 1,800. Loss on realisation was ₹ 6,300. Total assets (including cash balance) realised will be:
(a) ₹ 69,200
(b) ₹ 71,000
(c) ₹ 64,700
(d) ₹ 62,900
Ans:- c)
On dissolution of a firm, partner’s capital accounts balance was ₹ 63,000; creditors balance was ₹ 12,000 and profit & Loss account debit balance was ₹ 6,000. Profit on realisation on assets was ₹ 7,800. Total amount realised from assets was:
(a) ₹ 81,000
(b) ₹ 76,800
(c) ₹ 70,800
(d) ₹ None
Ans:- (b)
Rohit, a partner is to carry out dissolution and he gets ₹ 50,000 as remuneration. Realisation Expenses were ₹ 25,000. Realisation Account will be debited with
(a) ₹ 50,000
(b) ₹ 75,000
(c) ₹ 25,000
(d) ₹ 1,00,000
Ans:- (b)
The firm paid realisation expenses of ₹ 10,000 on behalf of Nihar, a partner with whom it was agreed at ₹ 25,000. Realisation Expenses came to ₹ 35,000. Realisation Account will be debited by
(a) ₹ 10,000
(b) ₹ 35,000
(c) ₹ 25,000
(d) ₹ 70,000
Ans:- (c)
Which of the following is not transferred to Realisation Account?
(a) Balance of Profit & Loss A/c
(b) Advertisement Suspense A/c
(c) Partner’s Loan
(d) All of the above
Ans:- (d)
Which of the following does not result into reconstitution of a firm?
(a) Dissolution of partnership firm
(b) Dissolution of partnership
(c) Change in profit sharing ratio of existing partners
(d) Death of a partner
Ans:- (a)
On dissolution of a partnership firm, out of total debtors of ₹ 2,50,000, ₹ 10,000 were not realisable and the balance realised 70%. In the given case, ________ will be debited by _________.
(a) Realisation A/c; ₹ 1,75,000
(b) Realisation A/c; ₹ 1,68,000
(c) Bank A/c; ₹ 1,82,000
(d) Bank A/c; ₹ 1,68,000
Ans:- (d)
At the time of dissolution of a firm, Debtors were ₹17,000 out of which ₹500 became bad and the rest realised 60%. Which account will be debited and by how much amount?
a) Realiation Account by ₹16,500
b) Profit and Loss Account by ₹500
c) Cash Account by ₹9,000
d) Debtors Account by ₹7,100
Ans:- c)
In the Balance sheet, Debtors exist at ₹50,000 and Provision for Doubtful Debts at ₹1,500. How much amount will be realised from Debtors, if bad debts are ₹10,000 and remaining debtors are realised at a discount of 5%.
a) ₹38,000
b) ₹36,500
c) ₹36,575
d) ₹39,500
Ans:- a)
At the time of firm’s dissolution, if realised amount of an assets is not given, the realised value should be taken as
a) Book Value
b) Market Value
c) Nil
d) None of these
Ans:- c)
On dissolution of a partnership firm, furniture appearing in the Balance Sheet was ₹ 2,00,000. 50% of the furniture was taken over by a partner at ₹ 65,000 and balance 50% was sold at 20% less than the book value. The amount debited to Bank Account was
(a) ₹ 1,45,000
(b) ₹ 80,000
(c) ₹ 65,000
(d) ₹ 1,85,000
Ans:- (b)
Harsh (Partner) had given loan to firm of ₹ 5,00,000. On dissolution, he accepted furniture valued at ₹ 4,50,000 against the loan. ₹ 50,000 will be
(a) transferred to Realisation Account
(b) transferred to credit of his capital Account
(c) transferred to the debit of his Capital Account
(d) paid to him
Ans:- (d)
Investments of ₹2,00,000 were not shown in the boooks. One of the creditors tool these investments in settlement of his debt of ₹2,20,000. How much amount will be payable to that creditor?
a) ₹20,000
b) ₹2,20,000
c) ₹4,20,000
d) Nil
Ans:- d)
Anu, Bina and Charan are partners. The firm had given a loan of ₹20,000 to Bina. They decided to dissolve the firm. In the event of dissolution, the loan will be settled by
a) transferring it to debit side of Realisation Account
b) transferring it to credit side of Realisation Account
c) transferring it to debit side of Bina’s capital Account
d) Bina paying Anu and Charan privately
Ans:- c)
Rohit, a partner is to carry out dissolution and he gets ₹50,000 as remuneration. Realisation Expenses were ₹25,000. Realisatoin Account will be debited with
a) ₹50,000
b) ₹75,000
c) ₹25,000
d) ₹1,00,000
Ans:- b)
The firm pay realisation expenses of ₹10,000 on behalf of Nihar, a partner with whom it was agreed at ₹25,000. Realisation expenses came to ₹35,000. Realisaiton Account will be debited by
a) ₹10,000
b) ₹35,000
c) ₹25,000
d) ₹70,000
Ans:- c)
Which of the following will be transferred to Realisation Account at the time of dissolution of firm?
(i) Provision for Doubtful Debts
(ii) Partner’s Loan
(iii) General Reserve
(iv) Goodwill
(a) (i) and (iv)
(b) (i), (ii) and (iv)
(c) (i), (iii), and (iv)
(d) (i), (ii) and (iii)
Ans:- (a)
Mehak and Ravish were partners in a firm. On dissolution of the firm, the loan given by Mehak to the firm was ₹ 30,000, by Ravish was ₹ 15,000, and by Mrs. Ravish was ₹ 10,000. The first payment will be made for:
(a) Ravish’s loan
(b) Mehak’s loan
(c) Mrs. Ravish’s loan
(d) Mehak’s loan and Ravish’s loan in the ratio of their loan amount
Ans:- (c)
A firm is dissolved, Pawan, a partner is to carry out dissolution. ₹50,000 is fixed as his remuneration. Realisation expenses were ₹25,000, which were paid by Pawan. Pawan’s Caital Account will be credited by
a) ₹50,000
b) ₹75,000
c) ₹25,000
d) ₹1,00,000
Ans:- b)
A firm is dissolved, Param, a partner is to carry out dissolution for which he will get ₹5,000, including expenses. Realisation Expneses were ₹2,500. Realisatiion Account will be debited by
a) ₹5,000
b) ₹2,500
c) ₹7,500
d) None of these
Ans:- a)
At the time of dissolution, total assets are of ₹12,00,000 and external liabilities are of ₹4,80,000. If assets realised 120% and realisation expenses paid were ₹16,000. The gain or loss on realisation will be
a) Gain ₹2,40,000
b) Loss ₹2,40,000
c) Loss ₹2,24,000
d) Gain ₹2,24,000
Ans:- d)
On Dissolution of a partnerhsip firm, out of total debtors of ₹2,50,000, ₹10,000 become bad and the rest realised 70%. In the given case, _______ will be debited by ________ .
a) Realisation A/c, ₹1,75,000
b) Realisation A/c, 1,68,000
c) Bank A/c, ₹1,82,000
d) Bank A/c ₹1,68,000
Ans:- d)
The firm had outstanding loan of ₹ 3,00,000 given by Paresh (Partner). On dissolution, he accepted computers of ₹ 2,75,000 in settlement of loan. The accounting of above will be:
(a) Debit paresh’s Loan A/c and Credit Realisation A/c by ₹ 2,75,000.
(b) Debit Paresh’s Loan A/c and Credit Realisation A/c by ₹ 3,00,000
(c) Debit Paresh’s Loan A/c by ₹ 3,00,000 and Credit Realisation A/c by ₹ 2,75,000 and Paresh’s Capital A/c by ₹ 25,000.
(d) None of the above
Ans:- (b)
Amit (Partner) has debit balance of ₹ 1,00,000 in his Capital Account and has credit balance of ₹ 2,00,000 in his Loan Account. On dissolution
(a) ₹ 1,00,000 will be transferred to his Capital Account and balance will be paid
(b) ₹ 2,00,000 will be transferred to his Capital A/c
(c) ₹ 2,00,000 will be paid to Amit
(d) ₹ 1,00,000 will be transferred to his Loan A/c from his Capital A/c
Ans:- (a)
