Chapter 4: Dissolution of Partnership Firm — Online MCQ Test
ACCOUNTANCY · CLASS 12 SECOND PUC · Karnataka State Board
Practice Chapter 4: Dissolution of Partnership Firm with a free chapter-wise online MCQ test.
This chapter covers: Dissolution Realisation Account Winding up Assets Realisation Liabilities Settlement Cash Account Bank Account Partner Loan Capital Deficiency Insolvency Final Settlement.
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Chapter 4: Dissolution of Partnership Firm — Important Questions & Answers
Dissolution of a partnership firm means:
- A. Closing down the business of the firm and ending the relationship among all partners
- B. Admission of a new partner without closing the business
- C. Change in profit-sharing ratio among existing partners
- D. Retirement of one partner while the firm continues
Answer: A. Closing down the business of the firm and ending the relationship among all partners
Dissolution of a firm means the business is wound up and the relationship among all partners comes to an end.
Dissolution of a firm means the business is wound up and the relationship among all partners comes to an end.
Which account is prepared to record the sale of assets and payment of liabilities on dissolution?
- A. Revaluation Account
- B. Realisation Account
- C. Partners' Current Account
- D. Profit and Loss Appropriation Account
Answer: B. Realisation Account
Realisation Account is prepared to close assets and liabilities and determine profit or loss on dissolution.
Realisation Account is prepared to close assets and liabilities and determine profit or loss on dissolution.
Assets of ₹1,00,000 and liabilities of ₹30,000 are transferred to Realisation Account. Assets realised ₹75,000, liabilities were settled for ₹28,000, and realisation expenses were ₹2,000. What is the result of realisation?
- A. Profit ₹3,000
- B. Loss ₹25,000
- C. Profit ₹25,000
- D. Loss ₹3,000
Answer: B. Loss ₹25,000
Debit side = ₹1,00,000 + ₹28,000 + ₹2,000 = ₹1,30,000; credit side = ₹30,000 + ₹75,000 = ₹1,05,000. Hence, loss = ₹25,000.
Debit side = ₹1,00,000 + ₹28,000 + ₹2,000 = ₹1,30,000; credit side = ₹30,000 + ₹75,000 = ₹1,05,000. Hence, loss = ₹25,000.
A firm has cash available of ₹90,000 after paying all outside liabilities. A and B share profits in the ratio 3:2. Their capitals are ₹60,000 and ₹40,000 respectively. There is a realisation loss of ₹25,000 and B has a loan of ₹10,000. What will be the final payments to A and B?
- A. A ₹45,000; B ₹45,000
- B. A ₹50,000; B ₹40,000
- C. A ₹45,000; B ₹40,000
- D. A ₹40,000; B ₹50,000
Answer: C. A ₹45,000; B ₹40,000
Loss is shared as A ₹15,000 and B ₹10,000. Final capital balances are A ₹45,000 and B ₹30,000; B's loan of ₹10,000 is also paid, so B receives ₹40,000.
Loss is shared as A ₹15,000 and B ₹10,000. Final capital balances are A ₹45,000 and B ₹30,000; B's loan of ₹10,000 is also paid, so B receives ₹40,000.
Partner A takes over machinery at ₹60,000 and also takes over creditors at ₹45,000. Realisation expenses of ₹3,000 are paid by A on behalf of the firm. What is the net effect on A's Capital Account?
- A. Debit ₹12,000
- B. Credit ₹12,000
- C. Debit ₹18,000
- D. Credit ₹18,000
Answer: A. Debit ₹12,000
A is debited ₹60,000 for asset taken over, credited ₹45,000 for liability taken over, and credited ₹3,000 for expenses paid. Net debit = ₹60,000 - ₹48,000 = ₹12,000.
A is debited ₹60,000 for asset taken over, credited ₹45,000 for liability taken over, and credited ₹3,000 for expenses paid. Net debit = ₹60,000 - ₹48,000 = ₹12,000.