Dissolution of Partnership Test

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Dissolution of Partnership Test - 4

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Weekly Quiz Competition

Question 1
1 / -0

How would you treat investment fluctuation reserve given in the balance sheet at the time of dissolution?

A
Debit side of partners’ capital account

B
Debit side of Realisation Account

C
Cash Account credit side

D
Credit side of Realisation Account

Solution

At the time of dissolution, investment fluctuation reserve should be transferred to the credit side of revaluation account. It should not be distributed as free reserve.it is transferred only if investments are there in the question.
Question 2
1 / -0

At the time of dissolution, how would you treat the loss shown by Profit and Loss A/c in the Balance Sheet?

A
Cash Account

B
Credit side of partners’ capital account

C
Dr. Side of Partners capital account

D
Realisation Account

Solution

Profit and Loss (Dr. balance) given in the balance sheet will be transferred to the debit side of partners capital account in their respective profit sharing ratio. It should not be transferred to the realization account as it is free reserve.
Question 3
1 / -0

Unrecorded asset when realised (in cash) will be _________

A
Credited to Realisation Account

B
Debited to Partners capital account

C
Credited to partners capital account

D
Debited to Realisation Account

Solution

Unrecorded asset (if any) given in the additional information, which is realized (sold) at the time of dissolution, should be shown in the credit side of Realisation Account because it is income and according to nominal account rule all incomes are credited.
Question 4
1 / -0

All _____ liabilities are transferred to the ____ side of Realisation account

A
External , Credit

B
Internal , Credit

C
Internal , Debit

D
Capitals of the partner, Credit

Solution

for closing the ledger account of external liabilities, these are transferred to the credit side of realisation account.
Question 5
1 / -0

Accumulated losses are transfer to ______ in ________ ratio

A
Partner's Capital account , Profit sharing ratio

B
Realisation account , Profit sharing ratio

C
Capital account , Gaining ratio

D
Realisation account, Gaining sharing ratio

Solution

At the time of dissolution all accumulated profits and losses should be transferred to the partners capital account in their profit sharing ratio as they are treated as free reserves. so free reserves are distributed among partners.
Question 6
1 / -0

If a liability is assumed (to be paid) by a partner in such a case partner capital account is ___

A
Debited

B
Credited

C
Both Credited and Debited

D
No effect on capital account

Solution

If a partner is agreed to pay off any liability at the time of dissolution of a partnership firm, in such a case following entry should be recorded in the books: Journal Entry:

Realisation A/c Dr.
To Partner’s Capital A/c
Question 7
1 / -0

Debtors given in the balance sheet ₹17,000. In additional information bad debts of ₹2,000 given and it is also given that debtors have paid their money in full and final settlement after 10% discount. How much amount is received from debtors?

A
13,500

B
15,000

C
17,000

D
15,300

Solution

Amount received from debtors:
Total amount due ₹17,000
Bad debts ₹2,000
Final amount received = 17,000 – 2,000 = 15,000 – 10% = 13,500
Question 8
1 / -0

If a partner agreed to pay the unrecorded liability then ______

A
Realisation account is credited and concerned partner’s account debited

B
Realisation account is debited and concerned partner’s capital account is credited.

C
Concerned partner’s account is debited

D
Only Realisation account is credited

Solution

When a partner agreed to pay any unrecorded liability since payment has to be made it is recorded on the debit side because of nominal nature of realisation account and partner's liability on the business is increased so partners capital is credited.
Question 9
1 / -0

Realisation Account is differ from Revaluation Account as

A
Prepared only twice during the life of a firm

B
prepared at three times during the life of a firm

C
Prepared only once during the life of a firm

D
prepared at a number of times during the life of a firm

Solution

Realisation Account is prepared only once in the life time of the firm i.e. at the time of dissolution. Revaluation account is prepared at the time of reconstitution of partnership firm i.e. change in existing profit sharing ratio, admission of a partner, retirement of a partner, death of a partner etc.
Question 10
1 / -0

When realized value of goodwill is given in adjustment, it indicates that ________

A
Goodwill is taken over by creditors.

B
Goodwill is written off by the old partners

C
Goodwill is purchased

D
Goodwill is sold

Solution

At the time of dissolution of a partnership firm, if any realized value of goodwill is given in the question, it shows that goodwill is sold with other assets of the firm.Goodwill can be sold only at the time of dissolution.

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Re-Attempt Weekly Quiz Competition

Dissolution of Partnership Test - 4

Result

Dissolution of Partnership Test - 4

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Rank

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SHARING IS CARING

Question 1

Debit side of partners’ capital account

Debit side of Realisation Account

Cash Account credit side

Credit side of Realisation Account

Solution

Question 2

Cash Account

Credit side of partners’ capital account

Dr. Side of Partners capital account

Realisation Account

Solution

Question 3

Credited to Realisation Account

Debited to Partners capital account

Credited to partners capital account

Debited to Realisation Account

Solution

Question 4

External , Credit

Internal , Credit

Internal , Debit

Capitals of the partner, Credit

Solution

Question 5

Partner's Capital account , Profit sharing ratio

Realisation account , Profit sharing ratio

Capital account , Gaining ratio

Realisation account, Gaining sharing ratio

Solution

Question 6

Debited

Credited

Both Credited and Debited

No effect on capital account

Solution

Question 7

13,500

15,000

17,000

15,300

Solution

Question 8

Realisation account is credited and concerned partner’s account debited

Realisation account is debited and concerned partner’s capital account is credited.

Concerned partner’s account is debited

Only Realisation account is credited

Solution

Question 9

Prepared only twice during the life of a firm

prepared at three times during the life of a firm

Prepared only once during the life of a firm

prepared at a number of times during the life of a firm

Solution

Question 10

Goodwill is taken over by creditors.

Goodwill is written off by the old partners

Goodwill is purchased

Goodwill is sold

Solution

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