Dissolution of Partnership Test

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Dissolution of Partnership Test - 3

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Weekly Quiz Competition

Question 1
1 / -0

Realisation Account is:

A
Nominal Account

B
P/L Adjustment A/c

C
Real Account

D
Personal Account

Solution

Nature of realization account is of Nominal account. All incomes are credited and all losses are debited.
Question 2
1 / -0

Under Garner Vs Murry Rule, the insolvency loss should be borne by solvent partners according to:

A
Profit sharing ratio

B
Final claims ratio

C
Maximum loss ratio

D
Capital ratio

Solution

Capital ratio
Question 3
1 / -0

Unrecorded liability will be shown in:

A
Debit side of cash A/c

B
Debit side of Realisation A/c

C
Debit side of partners’ capital A/c

D
Credit side of Realisation A/c

Solution

Any unrecorded liability (which is not given in the balance sheet or which was not recorded earlier) will be shown on the debit side of realization account. It will be paid by the firm at the time of dissolution or might be paid by a partner.
Question 4
1 / -0

When Asset is taken over by a creditor:

A
No Entry in this case

B
Debit side of Realisation A/c

C
Credit side of Realisation A/c

D
Only in Cash A/c

Solution

Any asset taken over by a liability at the time of dissolution of partnership firm, will not be shown separately or no separate entry will be recorded for the same.
Question 5
1 / -0

Money realised from the sale of unrecorded assets is debited to the _________

A
Revaluation Account

B
Cash Account

C
Balance Sheet

D
Partners capital account

Solution

Money realized from the sale of an unrecorded asset at the time of dissolution of partnership firm, should be shown in the credit side of realization account and debit side of cash account.
Question 6
1 / -0

All the assets of the firm are _____ and all outsiders’ liabilities and partners’ loan and partners capitals are ___ at the time of dissolution of firm.

A
Acquired , Paid

B
Disposed Off , Acquired

C
Paid , Disposed Off

D
Realised , Paid

Solution

At the time of dissolution of a partnership firm, all assets available in the business will be realized (sold) and all liabilities will be paid off.
Question 7
1 / -0

Which of the following Reserve or fund is not transferred to the Realisation Account?

A
Employee Provident Fund

B
Investment Fluctuation Reserve

C
Reserve for doubtful debts

D
Contingency Reserve

Solution

Contingency Reserves is a free reserve which is not transferred to the Realisation account at the time of dissolution of a partnership firm. Other reserves or funds (given in the above question) will be transferred to the Realisation account.
Question 8
1 / -0

When Realised value of an asset is not given, It should be taken at ______

A
Book Value

B
Market Value

C
Both Book Value and Market Value

D
Nil

Solution

If realized value of any asset is not given in the question, in such a case, realized value should be assumed as nil or Zero realized value
Question 9
1 / -0

If Creditors are given ₹20,000 in the balance sheet. But nothing is mentioned under additional information about the payment of the same. How much amount will be paid to the creditors?

A
Payment after 10% Discount

B
No Payment to Creditors

C
Half Amount Rs.10,000

D
Full Amount ₹20,000

Solution

All liabilities will be paid at the time of dissolution of a partnership firm. Whether some information is given or not about the payment of the same. In this case nothing is mentioned about the payment of creditors but it is mandatory to pay the full amount ₹20,000 to the creditors.
Question 10
1 / -0

If creditors given in the balance sheet ₹30,000. Stock costing ₹10,000 taken over by creditors at market price of ₹8,000 at the time of dissolution of partnership firm and balance amount paid in cash after deducting a discount of 10%. How much amount is paid in cash?

A
18,000

B
19,800

C
22,000

D
30,000

Solution

Calculation of the amount payable to the creditors:
Total amount payable to the creditors ₹30,000
Asset taken over by creditors at market price ₹8,000.
Now amount due to the creditors is ₹22,000 (30,000 – 8,000)
Final payment to creditors in cash = 22,000 – 2,200 (discount) = 19,800

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Re-Attempt Weekly Quiz Competition

Dissolution of Partnership Test - 3

Result

Dissolution of Partnership Test - 3

Score

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Rank

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SHARING IS CARING

Question 1

Nominal Account

P/L Adjustment A/c

Real Account

Personal Account

Solution

Question 2

Profit sharing ratio

Final claims ratio

Maximum loss ratio

Capital ratio

Solution

Question 3

Debit side of cash A/c

Debit side of Realisation A/c

Debit side of partners’ capital A/c

Credit side of Realisation A/c

Solution

Question 4

No Entry in this case

Debit side of Realisation A/c

Credit side of Realisation A/c

Only in Cash A/c

Solution

Question 5

Revaluation Account

Cash Account

Balance Sheet

Partners capital account

Solution

Question 6

Acquired , Paid

Disposed Off , Acquired

Paid , Disposed Off

Realised , Paid

Solution

Question 7

Employee Provident Fund

Investment Fluctuation Reserve

Reserve for doubtful debts

Contingency Reserve

Solution

Question 8

Book Value

Market Value

Both Book Value and Market Value

Nil

Solution

Question 9

Payment after 10% Discount

No Payment to Creditors

Half Amount Rs.10,000

Full Amount ₹20,000

Solution

Question 10

18,000

19,800

22,000

30,000

Solution

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