Dissolution Of A Partnership Firm(12th Grade > Accountancy ) Questions and Answers

Question 1.


At the time of dissolution, all the assets of the firm are transferred to Realisation Account at ___________ values.


  1.     Market
  2.     Book
  3.     Realizable
  4.     None of these
Explanation:-
Answer: Option B. -> Book
:
B

At the time of dissolution, all the assets of the firm are transferred to Realisation Account at book values.


Question 2.


Unrecorded Liability paid at the time of dissolution is debited to __________ and credited to ___________.


  1.     Realisation A/c, Cash A/c
  2.     Cash A/c, Realisation A/c
  3.     Cash A/c, Partner's Capital A/c
  4.     Partner's Capital A/c, Cash A/c
Explanation:-
Answer: Option A. -> Realisation A/c, Cash A/c
:
A

Unrecorded Liability paid at the time of dissolution is debited to Realisation A/c and credited to Cash A/c.


Question 3.


When a firm decides to close its business, it is said to be _________.


  1.     Reconstituted
  2.     Dissolved
  3.     Either Reconstituted or Dissolved
  4.     None of these
Explanation:-
Answer: Option B. -> Dissolved
:
B

When a firm decides to close its business, it is said to be dissolved


Question 4.


On the dissolution of the firm, cash in hand is transferred to ______________.


  1.     Realisation A/c
  2.     Partner's Capital A/c
  3.     Cash Account
  4.     Creditors Account
Explanation:-
Answer: Option C. -> Cash Account
:
C

On the dissolution of the firm, cash in hand is transferred to Cash Account.


Question 5.


Unrecorded Asset realised at the time of dissolution is debited to __________ and credited to ___________.


  1.     Realisation A/c, Cash A/c
  2.     Cash A/c, Realisation A/c
  3.     Cash A/c, Partner's Capital A/c
  4.     Partner's Capital A/c, Cash A/c
Explanation:-
Answer: Option B. -> Cash A/c, Realisation A/c
:
B

Unrecorded Asset realised at the time of dissolution is debited to Cash A/c and credited to Realisation A/c.


Question 6.


The expenses of Realisation are _______________  Realisation A/c.


  1.     Not shown in
  2.     Credited to
  3.     Debited to
  4.     None of these
Explanation:-
Answer: Option C. -> Debited to
:
C

The expenses of realisation are debited to Realisation A/c.


Question 7.


On dissolution of partnership, the realisation account is debited with :


  1.     All the liabilities of the firm
  2.     Cash received from the sale of assets
  3.     All assets to be realised
  4.     Any asset taken over by one of the partners.
Explanation:-
Answer: Option C. -> All assets to be realised
:
C

On dissolution of partnership, the realisation account is debited with all assets to be realised.


Question 8.


Do we need to pass entry for assets taken over by a creditor?


  1.     Yes.  Asset A/c Dr.     To Creditors A/c
  2.     Yes.  Creditors A/c Dr.     To  Asset A/c
  3.     No. Don't need to pass any entry.
  4.     None of these
Explanation:-
Answer: Option C. -> No. Don't need to pass any entry.
:
C

No. We don't need to pass any entry for assets taken over by a creditor.


Question 9.


Does court has authority to give order to dissolve the firm?


  1.     Yes
  2.     No
  3.     Can't say
  4.     None of these
Explanation:-
Answer: Option A. -> Yes
:
A

Yes, the court has authority to give order to dissolve the firm.


Question 10.


_____________ is/are not transferred to Realisation A/c.


  1.     Cash Balance
  2.     Bank Balance
  3.     Both Cash and Bank Balance
  4.     None of these
Explanation:-
Answer: Option C. -> Both Cash and Bank Balance
:
C

Cash and bank balance are not transferred to realisation account


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