Dissolution of Partnership Test

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Dissolution of Partnership Test - 8

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Weekly Quiz Competition

Question 1
1 / -0

Partners’ Capital Account is which type of account

A
Real Account

B
Both Personal Account and Nominal Account

C
Nominal Account

D
Personal Account

Solution

Partners’ Capital Account is a Personal Account. Any account which is directly concerned with the natural persons, will be personal account. There are three types of personal account:
1.Natural Persons Personal Account
2.Artificial Persons Personal Account
3.Representative Personal Account
Question 2
1 / -0

If a partner has given any loan to the firm, his loan will be paid ____ payment of all the outside liabilities : but _____making any payment to partners on account of capital

A
at the time of, Before

B
After, Before

C
Before, After

D
After, at the time of

Solution

At the time of dissolution of a partnership firm, all outsiders liabilities will be paid first, after that loan of the partner will be paid and then final payment is made to the partners on account of their capitals.
Question 3
1 / -0

Current Accounts of the partners will be closed by ______

A
Both Transferring in Capital Account and Transferring in Realisation Account

B
Transferring in Realisation Account

C
Transferring in Cash Account

D
Transferring in Capital Account

Solution

When capitals of the partners are fixed, in such a case all the items (at the time of dissolution) will be transferred to the current accounts of the partners. After all adjustments current accounts will be closed by transferring the respective capital accounts of the partners.
Question 4
1 / -0

If a partner takeover an assets such partner s account is ___

A
Both debit and credit

B
Debited

C
Credited

D
No Effect

Solution

Any asset taken over by the partner at the time of dissolution of a partnership firm, will be recorded in the debit side of his capital account as it reduces the capital of partner.
Question 5
1 / -0

Amount realized from the sale of assets will be transferred to ______ Account _____ side

A
Partners Capital, Debit

B
Cash, Credit

C
Realisation, Debit

D
Cash, Debit

Solution

Amount realized from the sale of assets at the time of dissolution will be transferred to the cash account debit side.since sale of assets will increase cash.
Journal Entry : cash A/c Dr.
To Realisation Account
Question 6
1 / -0

In case of deficiencies, losses will be met first from____

A
Capitals of the partners

B
Bankers

C
Creditors

D
Personal Property of partners

Solution

In case of deficiencies or losses including deficiencies of capital are to be paid first out of the capitals of the partners. When it is difficult to recover the losses from the capitals of the partners only then their personal property can be used.
Question 7
1 / -0

Can a partner’s loan be transferred in his capital account?

A
On special request of a partner

B
Not at all

C
If capital account shows a positive figure

D
If capital account shows a negative figure

Solution

Partner’s loan can be transferred in his capital account, when his capital account shows a negative balance as it will increase the capital of partner.
Question 8
1 / -0

Value of a Computer given in the balance sheet Rs.6,000. Market value of that computer is Rs.4,000. But nothing is mentioned in the question about the realized value of computer. How much realized value should be recorded?

A
2,000

B
6,000

C
4,000

D
Nil

Solution

When realized value of an asset is not given, in such a case it should be assumed that the asset is not realized ( that asset is not sold). Realised value will be Nil for that asset.
Question 9
1 / -0

If there is no liability on account of workmen’s compensation then the whole amount of workmen’s compensation fund will be credited to

A
Profit and Loss account

B
Partner’s Capital account

C
Revaluation account

D
Realisation account

Solution

When there is no liability towards workmen compensation fund, in such a case do not transfer it in realisation account. Workmen compensation reserve should be credited to the partners in their profit sharing ratio.
Question 10
1 / -0

When a partner capital account shows a debit balance, his loan account should be transferred to his Capital account by what amount

A
Whole amount

B
50 % amount

C
To the extent of Debit Balance

D
20 % amount

Solution

In Normal situation we do not transfer loan account of a partner in his capital account but at the time of dissolution when his capital account shows negative balance (at the time of closing) in such a case required amount can be recovered from his loan account and remaining amount of his loan will be paid back to him.

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Dissolution of Partnership Test - 8

Result

Dissolution of Partnership Test - 8

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SHARING IS CARING

Question 1

Real Account

Both Personal Account and Nominal Account

Nominal Account

Personal Account

Solution

Question 2

at the time of, Before

After, Before

Before, After

After, at the time of

Solution

Question 3

Both Transferring in Capital Account and Transferring in Realisation Account

Transferring in Realisation Account

Transferring in Cash Account

Transferring in Capital Account

Solution

Question 4

Both debit and credit

Debited

Credited

No Effect

Solution

Question 5

Partners Capital, Debit

Cash, Credit

Realisation, Debit

Cash, Debit

Solution

Question 6

Capitals of the partners

Bankers

Creditors

Personal Property of partners

Solution

Question 7

On special request of a partner

Not at all

If capital account shows a positive figure

If capital account shows a negative figure

Solution

Question 8

2,000

6,000

4,000

Nil

Solution

Question 9

Profit and Loss account

Partner’s Capital account

Revaluation account

Realisation account

Solution

Question 10

Whole amount

50 % amount

To the extent of Debit Balance

20 % amount

Solution

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