Dissolution of Partnership Test

Result

Dissolution of Partnership Test - 5

Score
-
out of -
Rank
-
out of -

TIME Taken - -

SHARING IS CARING

If our Website helped you a little, then kindly spread our voice using Social Networks. Spread our word to your readers, friends, teachers, students & all those close ones who deserve to know what you know now.

Weekly Quiz Competition

Question 1
1 / -0

Following accounts will be shown on debit side of Realisation Account except

A
Cash Received from Sale of Assets

B
Realisation Expenses

C
If any partner has taken over any liability,

D
Cash Payments of Liabilities

Solution

Cash received from the sale of assets will be shown in the credit side of realization account. Following items will be shown in the debit side:
•Cash Payments of Liabilities
•If any partner has taken over any liability
•Realisation Expenses
Question 2
1 / -0

At the time of dissolution, there was an unrecorded asset i.e. Laptop, market price of which was ₹24,000. This laptop was taken by a partner (Mohan) at 50% of the market price. Give journal entry for the same.

A

Mohan’s Capital A/c Dr. To Realisation Account 12,000 12,000

B

Bank A/c            Dr.     To Office Equipment A/c 10000 10000

C

Realisation A/c Dr. 12,000 To Mohan’s Capital A/c    12,000 12,000

D

Mohan’s Capital A/c Dr.    To Bank A/c 12,000 12,000

Solution

Market price Rs.24,000 and taken by Mohan @ 50% i.e. 12,000 Do not record market price of the asset in any account.since asset is taken over by partner, partner's capital account is debited and realisation account is credited.
Question 3
1 / -0

One Creditor worth ₹4,500 took over stock valued at Rs.5,200 in full satisfaction of his claim.

A

Creditors A/c   Dr. To Assets A/c       5,400 5,400

B

Creditors A/c   Dr. To Bank A/c          4,500 4,500

C

Creditors A/c   Dr.        To Realisation A/c    4,500 4,500

D
No Entry is required

Solution

If any asset is taken over by the external liabilities for the full settlement of their due amount, in such a case no need to record any journal entry.
Question 4
1 / -0

Total creditors of the firm (already transferred to Realisation Account) were ₹30,000. Out of this, creditors waived their claim of ₹5,000 while the rest agreed to allow discount @ 10% of their respective claim.

A

Realisation A/c   Dr.     To Bank A/c          22,500 22,500

B

Bank A/c            Dr.      To Realisation A/c 22,500 22,500

C

Realisation A/c   Dr.    To Bank A/c   25,000 25,000

D

Bank A/c            Dr.   To Realisation A/c 25,000 25,000

Solution

Calculation of the amount paid to the creditors in full settlement:
Total amount due to the creditors = 30,000
Amount waived by the creditors = 5,000
Amount due after deducting the amount waived by creditors = 30,000 – 5,000 = 25,000
Final Payment = 25,000 – 10% Discount = 22,500
Question 5
1 / -0

How goodwill account appear in the Balance sheet be treated in case of dissolution of firm

A
Transferred to capital account at market value

B
Transferred to realization account at book value

C
Transferred to realization account at market value

D
Transferred to capital account at book value

Solution

At the time of dissolution of partnership firm, goodwill given in the balance sheet should be transferred to the debit side of realisation account at its book value and not at the market value as it is a part of fixed assets of the business.
Question 6
1 / -0

What journal entry will take place when amount of liability is less than the amount of workmen compensation reserve?

A
Workmen Compensation Reserve A/c Dr.
To Bank A/c
To Partner’s Capital A/c

B
Realisation A/c Dr.
To Workmen Compensation Reserve

C
Realisation A/c Dr.
To Partners Capital A/cs
To Workmen Compensation Reserve

D
Workmen Compensation Reserve A/c Dr.
To Realisation A/c
To Partner’s Capital A/c

Solution

Following journal entry will take place:
Workmen Compensation Reserve A/c Dr.
To Realisation A/c
To Partner’s Capital A/c
Note: Amount equal to the liability should be transferred to the Realisation Account and the balance amount is credited to the capital accounts of the partners in their profit sharing ratio.

Question 7

1 / -0

Match the following

When assets are sold for cash

(i)Bank A/cDr

To Realisation A/c

When an asset is taken over by a partner

(ii)No entry

When the assets are given to any of the creditors towards the payment of his dues

(iii) Partner CapitalA/cDr

To Realisation A/c

Choose the correct option from below

a(i), b(ii), c(iii)

a(iii), b(ii), c(i)

a(i), b(iii), c(ii)

a(ii), b(iii), c(i)

Solution

Situation 1 : When assets are sold for cash (Bank A/c Dr. and Realisation A/c Cr.)
Situation 2 : When asset is taken over by a partner (Partner’s Capital A/c Dr. and Realisation A/c Cr.)
Situation 3 : When the assets are given to any of the creditors towards the payment of his dues (No Entry in such case).

Question 8
1 / -0

What is the accounting treatment of Investment Fluctuation Fund when it is given in the Balance sheet

A
Crediting Investment Fluctuation Fund A/c and debiting Partners Capital A/cs

B
Debiting Bank account and crediting Realisation account

C
Debiting Realisation account and crediting Investment Fluctuation Fund account

D
Debiting Investment Fluctuation Fund account and crediting Realisation account

Solution

At the time of dissolution of partnership firm, investment fluctuation fund should be credited (transferred) to the realization account and Investment should be transferred to the debit side of realization account.
Question 9
1 / -0

What journal entry will take place when loan of partner ₹60,000 is paid at the time of dissolution?

A
Partner’s Capital A/c Dr.
To Cash/Bank A/c

B
Cash/Bank A/c Dr
To Realisation A/c

C
Partner’s Loan A/c Dr.
To Cash/Bank A/c

D
Realisation A/c Dr.
To Cash/Bank A/c

Solution

When full amount is paid back to the partner for his loan, liability is decreasing so it is debited and asset is decreasing so it is credited.
Question 10
1 / -0

At the time of dissolution, partner’s loan account is not transferred to _____ account but is retained as a separate account.

A
Revaluation Account

B
Partner’s Capital account

C
Profit and Loss account

D
Realisation account

Solution

At the time of dissolution, loan of partner is not transferred to the realization account. For this a separate account is prepared i.e. Partner’s Loan A/c and final payment is made to the partner.

User

Question Analysis

Correct -
Wrong -
Skipped -

My Perfomance

Score
-
out of -
Rank
-
out of -

Re-Attempt Weekly Quiz Competition

Dissolution of Partnership Test - 5

Result

Dissolution of Partnership Test - 5

Score

-

Rank

-

SHARING IS CARING

Question 1

Cash Received from Sale of Assets

Realisation Expenses

If any partner has taken over any liability,

Cash Payments of Liabilities

Solution

Question 2

Mohan’s Capital A/c Dr. To Realisation Account 12,000 12,000

Bank A/c Dr. To Office Equipment A/c 10000 10000

Realisation A/c Dr. 12,000 To Mohan’s Capital A/c 12,000 12,000

Mohan’s Capital A/c Dr. To Bank A/c 12,000 12,000

Solution

Question 3

Creditors A/c Dr. To Assets A/c 5,400 5,400

Creditors A/c Dr. To Bank A/c 4,500 4,500

Creditors A/c Dr. To Realisation A/c 4,500 4,500

No Entry is required

Solution

Question 4

Realisation A/c Dr. To Bank A/c 22,500 22,500

Bank A/c Dr. To Realisation A/c 22,500 22,500

Realisation A/c Dr. To Bank A/c 25,000 25,000

Bank A/c Dr. To Realisation A/c 25,000 25,000

Solution

Question 5

Transferred to capital account at market value

Transferred to realization account at book value

Transferred to realization account at market value

Transferred to capital account at book value

Solution

Question 6

Workmen Compensation Reserve A/c Dr. To Bank A/c To Partner’s Capital A/c

Realisation A/c Dr. To Workmen Compensation Reserve

Realisation A/c Dr. To Partners Capital A/cs To Workmen Compensation Reserve

Workmen Compensation Reserve A/c Dr. To Realisation A/c To Partner’s Capital A/c

Solution

Question 7

a(i), b(ii), c(iii)

a(iii), b(ii), c(i)

a(i), b(iii), c(ii)

a(ii), b(iii), c(i)

Solution

Question 8

Crediting Investment Fluctuation Fund A/c and debiting Partners Capital A/cs

Debiting Bank account and crediting Realisation account

Debiting Realisation account and crediting Investment Fluctuation Fund account

Debiting Investment Fluctuation Fund account and crediting Realisation account

Solution

Question 9

Partner’s Capital A/c Dr. To Cash/Bank A/c

Cash/Bank A/c Dr To Realisation A/c

Partner’s Loan A/c Dr. To Cash/Bank A/c

Realisation A/c Dr. To Cash/Bank A/c

Solution

Question 10

Revaluation Account

Partner’s Capital account

Profit and Loss account

Realisation account

Solution

User

Question Analysis

My Perfomance

Score

-

Rank

-

Results Announcement on: coming Monday

Stay Tuned: We’ll update you on your result via email or SMS.

Workmen Compensation Reserve A/c Dr.
To Bank A/c
To Partner’s Capital A/c

Realisation A/c Dr.
To Workmen Compensation Reserve

Realisation A/c Dr.
To Partners Capital A/cs
To Workmen Compensation Reserve

Workmen Compensation Reserve A/c Dr.
To Realisation A/c
To Partner’s Capital A/c

Partner’s Capital A/c Dr.
To Cash/Bank A/c

Cash/Bank A/c Dr
To Realisation A/c

Partner’s Loan A/c Dr.
To Cash/Bank A/c

Realisation A/c Dr.
To Cash/Bank A/c