CUET Accountancy MCQs Unit IV Dissolution of Partnership Firm

Question: Dissolution of the firm means

a) All of the options

b) Business of the firms ends

c) Assets Sold

d) Liabilities paid

Answer: All of the options

Question: When Retiring partners balance is treated as loan , in the absence of any information, he will get:

a) Interest only 6% per annum

b) Interest 7.5%

c) Interest 12%

d) None of the options

Answer: Interest only 6% per annum

Question: How will you treat accumulated profit/losses at the time of dissolution of the firm

a) Transferred to partners Capital A/C

b) Transferred to partners Capital A/C

c) Transferred to partners Salary A/C

d) None of the options

Answer: Transferred to partners Capital A/C

Question: When a Partner dies, amount due to him will be paid to:

a) His Executor

b) Gainer partner

c) Remaining Partners

d) None of the options

Answer: His Executor

Question: Where it is agreed that a partner will be paid a lump sum amount for dissolution, if the payment is made by the firm, the payment is debited to

a) Concerned partners capital Account

b) Realisation Account

c) All the partners capital Account

d) None of the options

Answer: Concerned partners capital Account

Question: Reason for preparing Profit and Loss suspense Account is to

a) Adjust the profit of deceased partner

b) Adjust the Revaluation profit

c) Adjust the capital of deceased partner

d) Adjust the Revaluation loss

Answer: Adjust the profit of deceased partner

Question: At the time of admission of a new partner, the new partner acquires his share from the old partners in the:

a) Sacrificing ratio

b) New Ratio

c) New Ratio

d) Old ratio

Answer: Sacrificing ratio

Question: On dissolution of the firm , Cash balance is transferred to

a) Bank Account

b) Realisation Account

c) Partners capital A/c

d) None of the options

Answer: Bank Account

Question: Revaluation Account is also known as ________

a) Profit and Loss Adjustment Account

b) Asset Account

c) Profit and Loss Account

d) None of the options

Answer: Profit and Loss Adjustment Account

Question: Give circumstances under which the fixed capitals of partners may change

a) Both

b) When fresh capital is introduced by the partner

c) When a part of capital is withdrawn by the partner

d) None of the options

Answer: Both

Question: Why there is need to calculate New profit share ratio

a) After retirement of a partner, there will be change in the continuing partners ratio.

b) After retirement of a partner, there is no change in the continuing partners ratio.

c) To settle the loan amount due to outgoing partner

d) All of the options

Answer: After retirement of a partner, there will be change in the continuing partners ratio.

Question: _______ is prepared at the time of dissolution :

a) Revaluation Account

b) Profit & Loss Account

c) Profit and Loss Appropriation Account

d) Realisation Account

Answer: Realisation Account

Question: Which of the following is prepared at the time of retirement of a partner?

a) Revaluation Account

b) Profit and Loss Suspense Account

c) Both

d) None of the options

Answer: Revaluation Account

Question: At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :

a) Realisation Account

b) Creditor’s Account

c) Partner’s Capital Account

d) Profit & Loss Account

Answer: Partner’s Capital Account

Question: 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 Account

Answer: Cash Account

Question: 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

Answer: Realisation expenses paid by partner

Question: On the basis of following data, final payment to a partner on firm’s dissolution will be made :
Debit balance of Capital Account Rs. 14,000; Share of his profit on realisation Rs.43,000; Firm’s asset taken over by him for Rs. 17,000.

a) Rs.31,000

b) Rs.29,000

c) Rs. 12,000

d) Rs.60,000

Answer: Rs. 12,000

Question: At the time of dissolution^ partner gives his personal asset to firm's creditor in settlement, the account credited will be

a) Realisation A/c.

b) Partner's Capital A/c.

c) Cash A/c.

d) Creditor's A/c.

Answer: Partner's Capital A/c.

Question: On dissolution of a firm, firm’s Balance Sheet total is Rs.77,000. On the assets side of the Balance Sheet items were shown preliminary expenses Rs.2,000; Profit & Loss Account (Debit) Balance Rs.4,000 and Cash Balance Rs. 1,800. Loss on realisation was Rs.6,300. Total assets (including cash balance) realised will be :

a) Rs.69,200

b) Rs.71,000

c) Rs.64,700

d) Rs.62,900

Answer: Rs.64,700

Question: How much amount will be paid to Creditors for Rs.25,000 if Rs.5,000 of the creditors are not to be paid and the remaining creditors agreed to accept 5% less amount?

a) Rs. 18,750

b) Rs. 19,000

c) Rs. 19,750

d) Rs.20,000

Answer: Rs. 19,000

Question: Rohit, a partner is to carry out dissolution and he gets Rs. 50,000 as remuneration. Realisation Expenses were Rs. 25,000. Realisation Account will be debited with

a) Rs. 50,000.

b) Rs. 75,000.

c) Rs. 25,000.

d) Rs. 1,00,000.

Answer: Rs. 75,000.

Question: At time of dissolution of partnership firm, the balance of profit and loss account shown in the assets side of Balance sheet of the firm is transferred to:

a) Realisation Account

b) Cash Account

c) Capital Accounts of partners

d) Loan Accounts of partners

Answer: Capital Accounts of partners

Question: 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 asset taken over by one of the partners

Answer: All assets to be realised

Question: 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 liabilites

c) None of the two

d) Any of the two

Answer: The personal liabilites

Question: On firm’s dissolution, when a partner voluntarily gives his personal asset to firms’ 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

Answer: Partner’s Capital A/c

Question: Unrecorded assets when taken over by a partner are shown in

a) Credit of realisation account

b) Debit of realisation account

c) Debit of bank account

d) All of the options

Answer: Credit of realisation account

Question: On dissolution of a firm, In order to record the sale of assets and discharge of liabilities, a nominal account is opened named

a) Realisation account

b) Profit & loss A/c

c) Profit & loss adjustment A/c

d) None of the options

Answer: Realisation account

Question: Profit and loss appropriation A/c is prepared to

a) Find out divisible profit

b) Create reverse fund

c) Find out net profit

d) None of the options

Answer: Find out divisible profit

Question: A Partner took over the Investments of Rs 15000 at Rs 19000 on dissolution of a Firm. What amount will be credited in Realisation Account?

a) Rs 15000

b) Rs 19000

c) Rs 4000

d) Rs 23000

Answer : Rs 19000

Question: In the absence of partnership deed, Partners are not entitled to receive

a) All of the options

b) Salaries

c) Commission

d) Interest on capital

Answer: All of the options

Question: In realisation account, sale of assets is recorded at their

a) Realised value.

b) Cost Value

c) Book Value

d) None of the options

Answer: Realised value.

Question: The modes by which a firm may be dissolved are

a) All of the options

b) By Mutual agreement

c) Compulsory Dissolution

d) By Notice

Answer: All of the options

Question: On dissolution, the balance of ‘Profit & Loss 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 Accounts

d) On the credit of Partner’s Capital Accounts

Answer: On the debit of Partner’s Capital Accounts

Question: Unrecorded assets when realised is credit to

a) Realisation A/c

b) Partners capital A/c

c) Current Account

d) None of the options

Answer: Realisation A/c

Question: In the Balance Sheet Total Debtors appear at Rs.50,000 and Provision for Doubtful Debts appear at Rs. 1,500. How much amount will be realised from Debtors, if bad debts amount to X 10,000 and remaining debtors are realised at a discount of 5%

a) Rs.38,000

b) Rs.36,500

c) Rs.36,575

d) Rs.39,500

Answer: Rs.38,000

Question: Sacrifice ratio is used only for

a) Distribution of Premium for goodwill

b) Revaluation profit

c) Distribution of Reserve

d) Revaluation of Assets

Answer: Distribution of Premium for goodwill

Question: Anu, Bina and Charan are partners. The firm had given a loan of Rs.20,000 to Bina. On the event of dissolution, the loan will be settled by :

a) Transferring it to debit side of Realization Account.

b) Transferring it to credit side of Realization Account.

c) Transferring it to debit side of Bina’s Capital Account.

d) Bina paying Anu and Charan privately.

Answer: Transferring it to debit side of Bina’s Capital Account.

Question: At the time of increase in the value of assets which account should be debited while preparing Revaluation Account?

a) Asset A/c

b) Partners Capital A/c

c) Revaluation Account

d) None of the options

Answer: Asset A/c

Question: A firm is dissolved, Pawan, a partner is to carry out dissolution. Rs. 50,000 is fixed as his remuneration. Realisation Expenses were Rs. 25,000, which were paid by Pawan. Pawan's Capital Account will be credited by

a) Rs. 50,000.

b) Rs. 75,000.

c) Rs. 25,000.

d) Rs. 1,00,000.

Answer: Rs. 50,000.

Question: Retirement or death of a partner will create a situation for the continuing partners, which is known as:

a) Reconstitution of Firm

b) Dissolution of firm

c) Amalgamation

d) None of the options

Answer: Reconstitution of Firm

Question: On dissolution of a firm, a partner’s capital account has a credit balance of Rs.42,000. His share of profit in realisation account is Rs. 9,000. He has paid firm’s realisation expenses Rs.3,000. He will finally get a payment of:

a) Rs.39,000

b) Rs.42,000

c) Rs.54,000

d) Rs.48,000

Answer: Rs.54,000

Question: Deceased partners share of profit is shown in:

a) Credit side of his capital account

b) Debit side of his capital account

c) Both

d) None of the options

Answer: Credit side of his capital account

Question: Only in Balance Sheet At the time of retirement of a partner, general reserve given in the balance sheet should be credited to all the partners (including outgoing partner) in their old profit sharing ratio.

a) Credit side of Capital account of all the partners

b) Debit side of Capital account of all the partners

c) Both

d) None of the options

Answer: Credit side of Capital account of all the partners

Question: The continuing partners may agree on a specified new profit sharing ratio so in that case the specified ratio will be the:

a) New ratio

b) Old ratio

c) Sacrificing ratio

d) None of the options

Answer: New ratio

Question: 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 Partnei

d) None of the Above

Answer: Capital Account of the Partnei

Question: What time would be taken into consideration if equal monthly amount is drawn as drawing at the beginning of each month

a) 6.5 Month

b) 5.5 Month

c) 6 month

d) None of the options

Answer: 6.5 Month

Question: If opening capitals of partners are A Rs.3,00,000, B Rs.2,00,000 and C Rs.1,00,000 and their drawings during the year are A Rs. 50,000, B Rs.40,000 and C Rs. 30,000 and creditors are Rs.60,000, what will be the amount of assets of the firm?

a) Rs.5,40,000

b) Rs.4,20,000

c) Rs.4,80,000

d) Rs.6,60,000

Answer: Rs.5,40,000

Question: Gobind, Hari and Pratap are partners. On retirement of Gobind, the goodwill already appears in the Balance Sheet at T 24,000. The goodwill will be written off

a) By debiting all partners capital accounts in their old profit sharing ratio

b) By debiting remaining partners capital accounts in their new profit sharing ratio

c) By debiting retiring partners capital accounts from his share of goodwill

d) None of the options

Answer: By debiting all partners capital accounts in their old profit sharing ratio

Question: The firm paid realisation expenses of Rs. 10,000 on behalf of Nihar,a partner with whom it was agreed at Rs. 25,000. Realisation Expenses came to Rs. 35,000. Realisation Account will be debited by

a) Rs. 10,000.

b) Rs. 35,000.

c) Rs. 25,000.

d) Rs. 70,000.

Answer: Rs. 25,000.

Question: 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 expiry of the period of partnership

d) On loss in partnership

Answer: On expiry of the period of partnership

Question: On dissolution of a firm, out of the proceeds received from the sale of assets ............ wiltjbe paid first of all

a) Partner’s Capital

b) Partner’s Loan to Firm

c) Partner’s additional capital

d) Outside Creditors

Answer: Outside Creditors

Question: Sundry Creditors amounted to Rs.8,000. These were paid at a discount of 5%.

Realisation account will be debited by

a) Rs.8,000

b) Rs.7,600

c) Rs.400

d) Rs. 8,400

Answer: Rs.7,600

Question: On the basis of following data, what final payment to a partner on firm's dissolution will be made: Debit balance of Capital Account Rs. 14,000. Share of his profit on realisation Rs. 43,000; Firm's asset taken by him for Rs. 17,000.

a) Rs. 31,000

b) Rs. 29,000

c) Rs. 12,000

d) Rs. 60,000

Answer: Rs. 12,000

Question: P, a partner, is to bear all expenses of realisation for which he is to be paid Rs.2,000. P had to pay realisation expenses of Rs.2,500. How much amount will be debited to Realisation Account?

a) Rs.500

b) Rs.2,500

c) Rs.4,500

d) Rs.2,000

Answer: Rs.2,000

Question: On Firm’s Dissolution, what entry will be Passed on realization of Goodwill which was shown in Balance sheet?

a) Goodwill A/C----Dr   

     To Realisation     

b) Cash A/C-----Dr   

    To Realisation    

c) Goodwill A/C---Dr

        To Cash

Answer : Cash A/C-----Dr   

    To Realisation    

Question: 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

Answer: Realisation Account

Question: After transferring liabilities like creditors and bills payables in the realisation account, in the absence of any information regarding then payment, such liabilities are treated as

a) Fully paid

b) Partly paid

c) Never Paid

d) None of the options

Answer: Fully paid

Question: If a fixed amount is withdrawn on the first day of every Quarter the interest on total drawing will be calculated for

a) 7.5 Month

b) 5.5

c) 6 month

d) 6.5

Answer: 7.5 Month

Question: On dissolution, losses are first of all met:

a) Out of Capital

b) Out of Profits

c) Out of private assets of partners

d) Out of loan from Bank

Answer: Out of Profits

Question: 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

Answer: Realisation Account

Question: 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

Answer: Patents Account

Question: Partners Capital Account will be debited in case o

a) Loss on Revaluation

b) Profit on Revaluation

c) General Reserve

d) None of the options

Answer: Loss on Revaluation

Question: 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

Answer: Amount realised on sale of assets

Question: How will goodwill account appearing in the balance sheet be treated in case of dissolution of the firm

a) By transferring to realisation A/c (Dr. Side)

b) By transferring to realisation A/c (Cr. Side)

c) Both Side

d) None of the options

Answer: By transferring to realisation A/c (Dr. Side)

Question: What is the meaning of change in the profit sharing ratio:

a) Purchase of shares of profit by one partner form another partner

b) In which all partner including the new partner share future profit and loss

c) In which all partner including the retired partner share future profit and loss

d) None of the options

Answer: Purchase of shares of profit by one partner form another partner

Question: Unrecorded Liabilities when paid are debited to

a) Realisation A/c

b) Partners capital A/c

c) Current Account

d) None of the options

Answer: Realisation A/c

Question: What balance does a partners current account has

a) Both

b) Dr. Balance

c) Cr. Balance

d) None of the options

Answer: Both

Question: When a new partner is admitted he acquires his share of profits from the old partners , this will ____ the old partners shares in profits:

a) Reduce

b) Remain same

c) No change

d) Decrease

Answer: Reduce

Question: On retirement/death of a partner, the remaining partner(s) who have gained due to change in profit sharing ratio should compensate the

a) Remaining partners (who have sacrificed) as well as retiring partners.

b) Retiring partners only.

c) Remaining partners only (who have sacrificed).

d) None of the options

Answer:  Remaining partners (who have sacrificed) as well as retiring partners.

Question: When the New ratio is deducted with Old Ratio we get:

a) Gaining Ratio

b) Sacrifice only

c) Profit Sharing ratio

d) None of the options

Answer: Gaining Ratio

Question: On dissolution, partner’s loan is transferred to :

a) Partner’s Capital Account

b) Realisation Account

c) Partner’s Loan Account

d) Revaluation Account

Answer: Partner’s Loan Account

Question: Which of the following is effect of the retirement of a partner?

a) share of remaining partners increases

b) share of remaining partners remains same

c) share of remaining partners decreases

d) All of the options

Answer: share of remaining partners increases

Question: 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

Answer: All of the Above

Question: On dissolution of a firm, an unrecorded furniture of the value of Rs.5,000 was taken up by a partner for Rs.4,300. Which Account will be credited and by how much amount? :

a) Cash Account by Rs.4,300

b) Realisation Account by Rs.700

c) Partner’s Capital Account by Rs.5,000

d) Realisation Account by Rs.4,300

 Answer: Realisation Account by Rs.4,300

Question: 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

Answer: Partner’s Capital Account

Question: The accumulated profits reserves are transferred to

a) Partners capital account

b) Realisation account

c) Bank account

d) None of the options

Answer: Partners capital account

Question: Anu, Bina and Charan are partners. The firm had given a loan of Rs. 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.

Answer: transferring it to debit side of Bina's Capital Account

Question: Which of the following is an appropriation of profit

a) Interest on capital

b) Interest on Loan

c) Salary

d) Rent

Answer: Interest on capital

Question: 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

Answer: Retirement of a partne

Question: Interest on Partners capital A/c is

a) An appropriation A/c

b) Expense

c) Gain

d) None of the options

Answer: An appropriation A/c

Question: On dissolution of a firm, a partner paid Rs 700 for firm’s realization expenses. Which account will be debited?

a) Cash account

b) Realisation account

c) Capital account of the partner

d) Profit & Loss account.

Answer : Realisation account

Question: An unrecorded asset was valued at Rs. 1,00,000. On firm’s dissolution, it was sold for 52%. Realisation account will be credited with :

a) Rs.52,000

b) Rs.48,000

c) Rs. 1,00,000

d) None of the Above

Answer: Rs.52,000

Question: On dissolution of a firm, debtors Rs. 17,000 were shown in the Balance Sheet. Out of this Rs.2,000 became bad. One debtor became insolvent. 70% were recovered from him out of Rs.5,000. Full amount was recovered from the balance debtors. On account of this item, loss in realisation account will be :

a) Rs.5,100

b) Rs. 1,500

c) Rs.3,500

d) Rs.2,000

Answer: Rs.3,500

Question: Profit or loss of realisation account is transferred to :

a) Profit & Loss Account

b) Capital Accounts of Partners

c) Balance Sheet

d) None of the Above

Answer: Capital Accounts of Partners

Question: Deceased partners share of profit is to be transferred to his account by:

a) P/L Suspense A/c

b) P/L Adjustment A/c

c) P/L Appropriation A/c

d) Revaluation Account

Answer: P/L Suspense A/c

Question: Why a new partner is admitted in the firm?

a) For Increase the Capital of the firm.

b) For Increase the Number of partners

c) For Increase the Profit sharing Ratio

d) None of the options

Answer: For Increase the Capital of the firm.

Question: Bad debts recovered will

a) Increase the Revaluation Profit

b) Decrease the Revaluation Profit

c) Both

d) None of the options

Answer: Increase the Revaluation Profit

Question: Why new profit ratio is determined even for old partners?

a) Change in the agreement among all partners

b) No change in agreement

c) Due to change in external environment

d) All of the options

Answer: Change in the agreement among all partners

Question: A draws 1000 Rs. Per month on the last day of every month. If the rate of interest is 5% P.A then the total interest on drawing will be

a) Rs. 275

b) Rs. 375

c) Rs. 300

d) Rs. 225

Answer: Rs. 275

Question: Except outgoing partner, which other partner can be credited at the time of settlement of goodwill amount?

a) Sacrificing partner

b) Gaining partner

c) All the partners

d) None of the options

Answer: Sacrificing partner

Question: On dissolution of a firm, a partner paid Rs.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

 Answer: Realisation Account

Question: Amount received from sale of unrecorded asset at the time of dissolution ofthe firm is credited to

a) Partners’ Capital Accounts.

b) Profit and Loss Account.

c) Realisation Account.

d) Cash Account.

Answer: Realisation Account.

Question: If total assets are Rs.2,00,000; total liabilities are Rs.40,000; amount realised on sale of assets is Rs. 1,75,000 and realisation expenses are Rs.3,000, the profit or loss on realisation will be :

a) Profit Rs. 12,000

b) Loss Rs.68,000

c) Loss Rs.28,000

d) Loss Rs.25,000

Answer: Loss Rs.28,000

Question: An unrecorded asset was valued ar Rs 100000.On Firm’s dissolution, it was sold for 52%.Realisation Account will be credited with

a) Rs 48000

b) Rs 100000

c) Rs 52000

Answer : Rs 52000

Question: On firm's Dissolution, Patents realised at Rs. 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

Answer: Realisation A/c

Question: Why is realisation account prepared

a) Closing the accounts

b) Opening the account

c) For profit sharing

d) None of the options

Answer: Closing the accounts

Question: The incoming partner cannot acquire his share of profits :

a) From the old partners in their new profit sharing ratio

b) From the old partners in their old profit sharing ratio

c) From one or more partners (not from all partners)

d) From the old partners in some agreed ratio

Answer: From the old partners in their new profit sharing ratio

Question: Deceased partner share of profit can be calculated on the basis of

a) Time basis and Sale Basis

b) Sales basis

c) Time basis

d) None of the options

Answer: Time basis and Sale Basis

Question: In the absence of any information regarding the acquisition of share in profit of the retiring/deceased partner by the remaining partners, it is assumed that they acquire his/her share

a) Old profit sharing ratio

b) New profit sharing ratio

c) Gaining Ratio

d) None of the options

Answer: Old profit sharing ratio

Question: Gaining Ratio is Applicable for:

a) Retiring partners share of goodwill only

b) For the distribution of Reserves and profits

c) For the Calculation of profit

d) For Revaluation

Answer: Retiring partners share of goodwill only

Question: How sacrificing ratio is differ from gaining ratio on the basis of mode of calculation

a) calculated by taking difference between old and new ratio

b) calculated by taking difference between new and old ratio

c) calculated by taking difference between old and gaining ratio

d) None of the options

Answer: calculated by taking difference between old and new ratio

Question: While transferring assets to realisation account is omitted to be transferred:

a) Patents

b) Goodwill

c) Cash

d) Investments

Answer: Cash

Question: At the time of dissolution of firm, at which stage 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.

 Answer: After making the payment to third party for their loans as well as partners loans

Question: 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.

Answer: On the Debit of Realisation Account

Question: Unrecorded liability, when paid on dissolution of a firm is debited to:

a) Profit & Loss account

b) Realizationaccount

c) Liabilities account

d) No need to record

Answer : Realizationaccount

Question: On dissolution of a firm, a partner took over Rs. 17,000 investments for Rs. 14,000. Which one of the following account will be debited/credited with how much amount?

a) Partner’s Capital Account Debit with Rs. 14,000

b) Partner’s Capital Account Credit with Rs. 17,000

c) Realisation Account Credit with Rs. 17,000

d) Realisation Account Credit with Rs.3,000

Answer: Partner’s Capital Account Debit with Rs. 14,000

Question: On dissolution, the final balance of capital accounts are transferred to :

a) Realisation Account

b) Cash Account

c) Profit & Loss Account

d) Loan Accounts of Partners

Answer: Cash Account

Question: On dissolution of the firm, partners capital accounts are closed through

a) Bank account

b) Drawings account

c) Realisation account

d) Partners capital account

Answer: Bank account

Question: Anukalp and Karan are partners with the capital of Rs. 25000 and 15000 respectively, Interest payable on capital is 10% P.A, find the Interest on capital for both the partners when the profits earned by the firm is Rs 2400

a) 1500 and 900

b) 2500 and 1500

c) 1200 and 1500

d) None of the options

Answer: 1500 and 900

Question: Calculate on interest on drawing @ 12% p.a for Abhishek if he withdraw Rs. 2000 once in month

a) 1440

b) 1220

c) 1320

d) 1300

Answer: 1440

Question: On dissolution, if a partner undertakes to make payment of a liability of the firm is debited)

a) Profit & Loss Account

b) Realisation Account

c) Partner’s Capital Account

d) Cash Account

Answer: Realisation Account

Question: In case of change in profit sharing ratio among the existing partners who will compensate the existing partners:

a) Gaining partner shall compensate

b) Only one partner

c) Sacrificing partner shall compensate

d) None of the options

Answer: Gaining partner shall compensate

Question: 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

Answer: When a partner transfers his share to some other person without the consent of other partners

Question: what will be the accounting treatment of balance of the realisation account

a) Transferred to partners Capital A/C in their profit sharing ratio

b) Transferred to partners Capital A/C in their old ratio

c) Transferred to partners Capital A/C in their new ratio

d) None of the options

Answer: Transferred to partners Capital A/C in their profit sharing ratio

Question: On dissolution of a firm, an unrecorded furniture of Rs. 5,000 was taken by a partner for Rs. 4,300 against payment. Which Account will be credited and by how much amount?

a) Cash Account by Rs. 4,300.

b) Realisation Account by Rs.700.

c) Partner's Capital Account by Rs. 5,000.

d) Realisation Account by Rs. 4,300.

Answer: Realisation Account by Rs. 4,300.

Question: On dissolution of a firm, bank overdraft is transferred to

a) Realisation account

b) Partners capital account

c) Bank account

d) None of the options

Answer: Realisation account

Question: Section ____ of the Indian Partnership Act provides that a new partner shall not be inducted into a firm without the consent of all existing partners

a) 31

b) 35

c) 40

d) 45

Answer: 31

Question: W, X, Y and Z are equal partners, W, X and Z died together in plane crash, this accidents results in

a) Dissolution of partnership as well as firm

b) Dissolution of partnership

c) Dissolution of firm

d) None of the options

Answer: Dissolution of partnership as well as firm

Question: Calculate the interest on drawing @ 12% for Gambhir if he withdrew 2000 Rs. Once at the beginning of each month

a) 1560

b) 1500

c) 1200

d) 1000

Answer: 1560

Question: Gaining ratio is the ratio in which continuing partners have ______ the share from the outgoing partner

a) Acquired

b) Sacrificed

c) Both Acquired and Sacrificed

d) None of the options

Answer: Acquired

Question: On firm’s dissolution, a partner undertook firm’s creditors at Rs. 17,000. In this case the account will be credited :

a) Creditors A/c

b) Cash A/c

c) Realisation A/c

d) Partner’s Capital A/c

Answer: Partner’s Capital A/c

Question: On dissolution of a firm, debtors were Rs. 17,000. Of these Rs.500 became bad and the rest realised 60%. Which account will be debited and by how much amount?

a) Realisation Account by Rs. 16,500

b) Profit & Loss Account by Rs.500

c) Cash Account by Rs.9,900

d) Debtors Account by Rs.7,100

Answer: Cash Account by Rs.9,900

Question: On dissolution of firm, loss calculate in realisation account is debited/credited to which account?

a) Cash Account (Credit)

b) Partners’ Capital Accounts (Debit)

c) Partners’ Capital Accounts (Credit)

d) Realisation Account (Debit)

Answer: Partners’ Capital Accounts (Debit)

Question: P, a partner, is to bear realisation expenses for which he is to be paid Rs. 2,000. P had to pay realisation expenses of Rs. 2,500. How much amount will be debited to Realisation Account?

a) Rs. 500

b) Rs. 2,500

c) Rs. 4,500

d) Rs. 2,000

Answer: Rs. 2,000

Question: On dissolution of a firm, a partner took-over the investments of Rs. 15,000 at Rs. 19,000. By how much amount the Realisation Account will be credited?

a) Rs.4,000

b) Rs. 19,000

c) Nil

d) Rs.23,000

Answer: Rs. 19,000

Question: Calculation of sharing of profit up to date of death will be calculated on the basis of

a) Both Time basis and Turnover basis

b) Yearly basis

c) Monthly basis

d) None of the options

Answer: Both Time basis and Turnover basis

Question: On dissolution of the firm , all assets are transferred to realisation account at

a) Book Value

b) Market Value

c) Cost value

d) None of the options

Answer: Book Value

Question: On dissolution of a firm, its Balance Sheet revealed total creditors Rs.50,000; Total Capital Rs.48,000; Cash Balance Rs.3,000. Its assets were realised at 12% less. Loss on realisation will be :

a) Rs.6,000

b) Rs. 11,760

c) Rs. 11,400

d) Rs.3,600

Answer: Rs. 11,400

Question: At the time of dissolution of a firm, Creditors are Rs. 70,000; Partners’ capital is Rs. 1,20,000; Cash Balance is Rs. 10,000. Other assets realised Rs. 1,50,000. Profit/Loss in the realisation account will be :

a) Rs.60,000 (Loss)

b) Rs.80,000 (Profit)

c) Rs.40,000 (Loss)

d) Rs.30,000 (Loss)

Answer: Rs.30,000 (Loss)

Question: 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

Answer: At Book Value

Question: Which are the important objectives of preparing realisation account

a) All of the options

b) To close all the books of account

c) To record transactions relating to the sale of assets and discharge of liabilities

d) To determine profit or loss due to the realisation of assets and liabilities

Answer: All of the options 

Question: Fluctuating Capital A/c is credited with

a) All of the options

b) Interest on Capital

c) Profit of the year

d) Remuneration A/c

Answer: All of the options