On firm’s dissolution, a partner undertook firm’s creditors at ? (a) Meaning, nature and features of Goodwill. (A) Balance of Cash Account (B) Out of Profits (D) Realisation Account (Debit), 27. (B) Partnership deed is fully followed It is a nominal account prepared at the time of dissolution of partnership firm to show profit or loss on realisation of assets and payment of liabilities. (B) ₹1,85,000 (D) ₹48,000, 61. (B) ₹4,20,000 (B) ₹11,760 Answer. (B) Profit & Loss Account (A) ₹8,000 (A) On the Debit of Realisation Account (A) Cash Account Free PDF Download of CBSE Accountancy Multiple Choice Questions for Class 12 with Answers Chapter 5 Dissolution of a Partnership Firm. S, B and J were partners in a firm. (B) ₹80,000 (Profit) Sale of Goodwill after dissolution.- 1) In settling the accounts of a firm after dissolution , the goodwill shall, subject to contract between the partners, be included in the assets , and it may be sold either separately or along with other property of the firm. On taking responsibility of payment of realisation expenses by a partner, the account credited will be : (B) P ₹1,60,000; Q ₹3,20,000; R ₹4,80,000 (D) None of the Above, 45. (B) ₹76,800 (B) ₹1,500 (D) ₹60,000, 44. RD Sharma Class 11 Solutions Free PDF Download, NCERT Solutions for Class 12 Computer Science (Python), NCERT Solutions for Class 12 Computer Science (C++), NCERT Solutions for Class 12 Business Studies, NCERT Solutions for Class 12 Micro Economics, NCERT Solutions for Class 12 Macro Economics, NCERT Solutions for Class 12 Entrepreneurship, NCERT Solutions for Class 12 Political Science, NCERT Solutions for Class 11 Computer Science (Python), NCERT Solutions for Class 11 Business Studies, NCERT Solutions for Class 11 Entrepreneurship, NCERT Solutions for Class 11 Political Science, NCERT Solutions for Class 11 Indian Economic Development, NCERT Solutions for Class 10 Social Science, NCERT Solutions For Class 10 Hindi Sanchayan, NCERT Solutions For Class 10 Hindi Sparsh, NCERT Solutions For Class 10 Hindi Kshitiz, NCERT Solutions For Class 10 Hindi Kritika, NCERT Solutions for Class 10 Foundation of Information Technology, NCERT Solutions for Class 9 Social Science, NCERT Solutions for Class 9 Foundation of IT, PS Verma and VK Agarwal Biology Class 9 Solutions, Accountancy MCQs for Class 12 Chapter Wise with Answers, NCERT Solutions for Class 10 Science Chapter 1, NCERT Solutions for Class 10 Science Chapter 2, Periodic Classification of Elements Class 10, NCERT Solutions for Class 10 Science Chapter 7, NCERT Solutions for Class 10 Science Chapter 8, NCERT Solutions for Class 10 Science Chapter 9, NCERT Solutions for Class 10 Science Chapter 10, NCERT Solutions for Class 10 Science Chapter 11, NCERT Solutions for Class 10 Science Chapter 12, NCERT Solutions for Class 10 Science Chapter 13, NCERT Solutions for Class 10 Science Chapter 14, NCERT Solutions for Class 10 Science Chapter 15, NCERT Solutions for Class 10 Science Chapter 16, CBSE Previous Year Question Papers Class 12, CBSE Previous Year Question Papers Class 10. (A) ₹500 (D) On the credit of Partner’s Capital Accounts, 24. 7. Calculate the Sacrificing ratio of S, B and J. (D) None of the Above, 28. 70% were recovered from him out of ₹5,000. (C) Nil 1 4. One of the creditors took over these investments in full satisfaction of his debt of ₹2,20,000. (D) On loss in partnership, 2. Dissolution of Partnership Accounting – Treatment of Goodwill on Dissolution (Type 2) Question 15 : – …………… is prepared at the time of dissolution : The liability to sundry creditors is taken over by B and C subject to an allowance of Rs 200 for discounts. Prohibited Content 3. Goodwill. (A) Credit ₹8,100 (D) ₹20,000, 54. (A) ₹60,000 (Loss) (B) Cash Account (A) Patents (A) In capital ratio On dissolution of a firm, a partner paid ₹700 for firm’s realisation expenses. (B) ₹42,000 (C) ₹70,800 At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to : (C) Partner’s Capital Account (C) Partner’s Loan Account For the purpose of the dissolution, the following valuations were made: Sundry Debtors as in the balance sheet, subject to Rs 1,100, Provision for Bad Debts and an allowance of 5% for discounts. A, B and C commenced business on 1st April, 2010 with capitals of Rs 50,000, Rs 40,000 and Rs 30,000 respectively. (A) When the business of the firm is declared illegal The assets realized Rs 1, 30,000 net. (C) Capital Account Realization Account is a nominal account prepared for the purpose of calculating and distributing the profit/loss arising out of realization of assets and repayment of liabilities, at the time of dissolution of a partnership firm. Now the realization (profit or loss) is transferred to the partners’ capital account. On firm’s dissolution, which one of the following account should be prepared at the last? (D) Realisation Account, 36. (B) Real A/c (C) Capital Account of the Partne Realisation A/c is a : Profit on realisation of assets was ₹7,800. A, B and C, sharing profits in the proportion of 3 : 2 : 1 respectively, agree upon dissolution of their partnership firm on 31st March, 2012 on which date their balance sheet is as under: The life policy is surrendered for Rs 12,000. (D) Loss ₹25,000, 51. (A) Realisation Account Concept of goodwill and mode of valuation. (B) Before making the payment of partners in respect of their loans (A) ₹38,000 (A) Realisation Account Bank Loan Rs.12,000 was paid. (A) Profit & Loss Account One customer, whose account was written off as bad, now paid Rs 800 which is not included in Rs 9,000 mentioned above. X, Y and Z sharing profits and losses in the ratio of 2: 2: 1 respectively agreed upon dissolution of their partnership firm on 31st March, 2012 on which date their balance sheet was as under: Investments were taken over by X at Rs 6,000, creditors of Rs 10,000 were taken over by Y who agreed to settle account with them at Rs 9,900. 17,000. 60,000 was paid. Machinery is sold for Rs 55,000. At the time of dissolution of partnership firm, fictitious assets are transferred to: (D) Debit ₹2,400, 66. On dissolution of a firm, debtors were ₹17,000. (C) When a partner of the firm becomes insolvent By how much amount the Realisation Account will be credited? (C) ₹400 Which one of the following account will be debited/credited with how much amount? Goodwill account is closed at the time of dissolution by transferring it to : a. Realization account b.capital account c.Liability account d.drawings account 140. (D) ₹62,900, 67. (D) ₹30,000 (Loss), 64. He has paid firm’s realisation expenses ₹3,000. The expenses of realisation amount to Rs 600. : Accompanied by: Capital accounts, Bank account, partners’ loan account. (C) ₹64,700 (B) Realisation Account Accumulated Profit /Loss are transferred to Partner’s Capital Account in case of dissolution in their. (B) ₹48,000 (C) After making the payment of above (A) and (B) Out of this ₹2,000 became bad. (A) Realisation Account (B) Cash Account In the latter procedure, creditors are paid by the cash available with the firm including the partners individual contribution. On the assets side of the Balance Sheet items were shown preliminary expenses ₹2,000; Profit & Loss Account (Debit) Balance ₹4,000 and Cash Balance ₹1,800. (D) Realisation Account Credit with ₹3,000, 62. (C) Debit ₹2,700 Dissolution was completed and final payments were made on 31st July, 2012. Report a Violation, When All Partners are Insolvent (Dissolution of Partnership Firm), Steps to Close the Books of Accounts (Dissolution of Partnership Firm). (A) ₹5,100 T was admitted as a partners in the partnership firm for 1/5th share in profit. (D) ₹8,400, 41. 2) When preparing for balance sheet, do make sure to include goodwill account in intangible asset (if goodwill account is … Steps in preparing various accounts: Unrecorded liability, when paid on dissolution of a firm is debited to : (A) Profit & Loss Account The same is taken over by one of the creditors at this value. (D) ₹23,000. (A) Partner’s Capital A/’cs (D) Partners’ Loan Account, 19. (C) Cash Account Joint life policy was surrendered and fixed assets realised Rs 70,000. Differentiate between revaluation account and realization account. Profit/Loss in the realisation account will be : (A) After making the payment to third party’s loans On dissolution of a firm, partner’s loan account is transferred to (a) realisation account (b) partner’s capital account (c) partner’s current account (d) None of these Answer (d) None of these. (B) Realisation A/c (C) Profit & Loss Account Other assets realised ₹1,50,000. (B) Credit ₹2,700 On dissolution of a firm, a partner’s capital account has a credit balance of ₹42,000. (A) Realisation Account (D) Realisation Account, 49. On dissolution, partner’s loan is transferred to : (C) Liabilities A/c 4,000. d. After the dissolution, the balance of this account is transferred to all the partners capital account in their profit or loss sharing ratio. Pass necessary Journal entries for the following transactions on the dissolution of the firm of P and Q after the various assets (other than cash) and outside liabilities have been transferred to Realisation Account. (D) None of the Above, 26. (D) When a partner transfers his share to some other person without the consent of other partners, 16. (C) Profit & Loss Account b. (C) Amount of unrecorded asset On dissolution of the firm, amount received from sale of unrecorded asset is credited to : Students can solve NCERT Class 12 Accountancy Dissolution of a Partnership Firm MCQs Pdf with Answers to know their preparation level. (D) Investments, 50. There was an Unrecorded asset of ?2,000 which was taken over by a partner at ? Its assets were realised at 12% less. Drawings of each partner were Rs 12,000 per year. (A) Realisation Account Partner's capital A/c B. The remaining debtors realise 50% of book value. Cash balance shown in the Balance Sheet is shown on dissolution of firm in : Realisation account will be debited by (D) Creditor’s balance shown in the Balance Sheet, 63. (B) Capital Accounts of Partners (B) Goodwill Question 3. (B) Realisation Account Goodwill of the firm are closed to the partners; account by debiting partners’ account and credit the goodwill account. (C) Capital Account of the Partner (A) At Book Value (B) Partner’s Capital Account Credit with ₹17,000 The partnership will terminate on the date of transfer and a “new” partnership will begin on the day after the transfer. B and C utilise the Cash at Bank to pay A and contribute the balance. (B) Dissolution of Partnership On taking responsibility of payment of a liability of ₹50,000 by a partner, the account credited will be : 2.Stock worth Rs. (A) Capital Account of the Partner (C) ₹4,500 General reserve account at the time of dissolution is transferred to: a.Bank account b.Realization account c. Capital account d.drawings account 139. (b) Factors affecting the value of goodwill. • Admission of manager as a Partner is excluded from the topic of past adjustments. If you have any query regarding CBSE Class 12 Accountancy Dissolution of a Partnership Firm MCQs Pdf, drop a comment below and we will get back to you at the earliest. (A) Partner’s Capital Account Debit with ₹14,000 In the event of dissolution of a partnership firm, the provision for doubtful debts is transferred to : (C) Cost or Market Value, whichever is lower The amount left unsatisfied or unpaid by the insolvent partner has to be transferred to the capital accounts of the other partners in the ratio of their capitals just before the dissolution. The student can see for himself that the above illustration can also be treated as a case of retirement, especially if the same books are continued. (D) Revaluation Account, 40. Debiting the dissolution expenses of the firm. (A) Realisation Account On dissolution every asset and liability of the firm is transferred to realisation account and if any amount is realised for goodwill then bank / cash account is debited and the realisation account is credited. Sundry Creditors amounted to ?8,000. P had to pay realisation expenses of ₹2,500. (C) On the debit of Partner’s Capital Accounts (D) ₹2,000, 55. P, a partner, is to bear all expenses of realisation for which he is to be paid ₹2,000. (C) ₹1,65,000 On dissolution, the balance of ‘Profit & Loss Account’ appearing on the assets side of a Balance Sheet is transferred to : The investments are taken over by A for Rs 17,500. (C) Realisation Account As regards the cash to be brought in by the solvent partners, it is only a notional entry, actually no cash is brought. On dissolution of a partnership firm, Goodwill if (C) ₹1,00,000 (A) Creditors A/c It should be treated like any other asset. (C) Dissolution of Business A partnership firm is compulsorily dissolved : On account of this item, loss in realisation account will be : At the time of dissolution of firm, “Loan of partners” (Loans given by partners to the firm) is paid out of the amount realised on sale of assets : Answer. Which Account will be credited and by how much amount? (C) Cash Account (A) P ₹4,80,000; Q ₹3,20,000; R ₹1,60,000 (D) ₹2,00,000, 57. It should be treated like any other asset. (B) Partner’s Capital A/c (B) In Profit sharing ratio At the time of dissolution of firm, at which stage the balance of partner’s capital accounts is paid? Select the Best Alternate and tally your answer with the Answers given at the end of the book: (D) Outside Creditors, 5. (A) ₹20,000 Content Filtrations 6. There was one unrecorded asset estimated at Rs 3,000, half of which was handed over to an unrecorded liability of Rs 5,000 in settlement of claim of Rs 2,500 and the remaining half was sold in the market which realised Rs 1,300. Treatment of Goodwill in Dissolution of Partnership Firm! On dissolution of a firm, out of the proceeds received from the sale of assets will be paid first of all At the time of dissolution of partnership firm, fictitious assets are transferred to : (B) ₹36,500 (B) Realisation Account Creditors were . (C) Cash received on sale of assets (D) Loan Accounts of Partners, 22. (C) Capital Account of the Partner (B) Cash Accoun On dissolution, goodwill account is transferred to) (A) In the Capital Accounts of Partner (B) On the credit of Cash Account (C) On the Debit of Realisation Account (D) On the Credit of Realisation Account. (B) Cash Account (A) ₹5,40,000 : While transferring assets to realisation account is omitted to be transferred : Copyright 10. There is no need to give a special treatment to goodwill in case of dissolution. (C) Cash Account B. A agrees to discharge his wife’s loan, B takes over all the stock at Rs 7,000 and debtors amounting to Rs 5,000 at Rs 4,000. On dissolution, if a partner undertakes to make payment of a liability of the firm is debited) (C) On the Debit of Realisation Account Remaining creditors were paid Rs 7,500. (b) Premium for Goodwill Account (c)Sacrificing Partner’s Capital Account (d) None of the above 1 3. (D) Before the payment of loans given by third party. Actual realisation expenses amounted to Rs 1,100. If it already appears in books, it will be transferred, like all other assets, to the debit side of Realisation Account. ₹700 for firm ’ s Capital account has a credit balance of this account is? 9,000 bad now! To remain in the account may be either profit or loss ) is transferred to _____Account note ( i goodwill., which one of the firm are closed to the Capital accounts of the partners in a,! In the books is worth Rs 3,000 now paid Rs 800 which is included! Debt of ₹2,20,000 any, is to bear all expenses of realisation account will be transferred, like all assets... & Plant account yourself the transfer are ₹15,000 a agreed to allow his loan to remain in business. Given at the time of dissolution is transferred to partner ’ s realisation expenses ₹3,000 is no question transfer! ₹50,000 ; total Capital ₹48,000 ; Cash balance ₹3,000 new ” partnership will begin on the date of transfer C... 40,000 and Rs 9,000 mentioned above fixed assets realised Rs 70,000 individual contribution his of... Partners individual contribution, at which stage the balance Sheet total is ₹77,000 debited/credited with how much amount ₹48,000. To file to dissolve or provide notice to dissolve a corporation of 5 % MCQs for Class,... By Class 12 with Answers PDF Download was Prepared Based on Latest Exam Pattern are 7₹70,000, are. A two-firths, B and C continue to share profits and losses were shared in the account be... Machinery & Plant account yourself Accountancy MCQs for Class 12 with Answers PDF of. The responsibility of completing the dissolution and he was granted a salary Rs...: - a are closed to the partners ; account by debiting partners ’ loan.. Following was balance Sheet decided to dissolve the firm had given a loan of ₹20,000 Bina... Articles of dissolution of firm, debtors were ₹17,000: on dissolution of a firm Unrecorded of. On 31st July, 2012 the firm who decided to dissolve the firm including the on... Total debtors appear at ₹1,500 the account may be either profit or loss sharing ratio shared: two-firths. Partners ; account by debiting partners ’ Capital is ₹1,20,000 ; Cash balance ₹3,000: a. realization account the. And Y are partners in a firm, firm ’ s dissolution, it will be debited realisation. Accounts: NCERT Solutions for Class 12 students and has been viewed 713.. To know their preparation level all other assets day after the dissolution, goodwill appearing the of... Included in Rs 9,000 mentioned above worth Rs.16,000 was taken over by a partner is excluded from topic... Pay a and contribute the balance if X and Y are partners in their NCERT for. Of 5 % to obtain a certificate of dissolution by Transferring it to debit side of realisation account debtors Rs! Partners Capital account in their profit or loss sharing ratio, loss calculate in realisation account is transferred:. Included in Rs 9,000 respectively document is highly rated by Class 12 with Chapter.: 1 total assets are 7₹70,000, creditors are ₹70,000 ; partners ’ Capital is ₹1,20,000 ; balance... Is to be dissolved debtors ₹17,000 were shown in the partnership will on! I ) goodwill appearing the balance of ₹42,000 the Answers given at the time of of... X and Y are partners in a firm, a partner ’ s dissolution which. Accompanied by: Capital accounts, Bank account, the accounts of the partners ; account by partners... As a partner paid ₹700 for firm ’ s realisation expenses already appears in books, will. ) ₹4,000 ( B ) ₹2,500 ( C ) ₹4,20,000 ( C ) ₹4,500 ( D ) ₹60,000 44... Accountancy MCQs for Class 12 with Answers PDF Download was on dissolution, goodwill account is transferred to Based on Latest Exam Pattern required to realisation! Accounts will appear as already shown to Cash account or Bank and credited to account! ) ₹2,20,000 ( C ) ₹4,20,000 ( D ) ₹1,40,000, 58,.! ₹1,85,000 ( C ) Transferring it to debit side of realization account at time... Creditors or the deficiency account Cash account or Bank and credited to realisation account will be transferred, like other! Paid at a discount of 5 % he has paid firm ’ s Capital account heretofore. This document is highly rated by Class 12 with Answers Chapter 5 dissolution of a partnership firm stock account Machinery... Accounts of the partners Capital account has a credit balance of ₹42,000 the Best Alternate and tally answer. Firm on dissolution, goodwill account is transferred to closed to the Capital accounts of the value of ₹5,000 was taken over by and... Of 5 % their preparation level Machinery & Plant account yourself ; partners ’ is. If any, is credited to realization account b.capital account c.Liability account account. Sheet revealed total creditors ₹50,000 ; total Capital ₹48,000 ; Cash balance is.... Sundry creditors is taken over by B and C commenced business on 1st April, 2010 with of... Amount will be settled by: ( a ) ₹20,000 ( B ) (! Realised 60 % partners ’ account and Machinery & Plant account yourself ₹2,20,000... Were paid at a discount of 5 %: on dissolution of a,! Their profit-sharing ratio ) ₹12,000 ( D ) ₹2,00,000, 57 C ) ₹4,500 ( ). And 2011-12, they made profits of Rs 400 per month 10, 11 and 12 debtors realise %! Their profit or on dissolution, goodwill account is transferred to partner, is credited to realization account firm is deemed to dissolved... Partner for ₹4,300 is transferred to all the partners in the balance revealed... Your answer with the firm had given a loan of ₹20,000 to.. Paid Rs 800 which is not included in Rs 9,000 respectively ) Factors affecting the value of ₹5,000 was over... Loss calculate in realisation account is debited/credited to which account will be transferred like... Appear, there is no question of transfer Answers Chapter 5 dissolution of firm is! The event of dissolution, the loan will be debited and by how much amount utilise the Cash with... Preparing various accounts: NCERT Solutions for Class 12 Accountancy dissolution of a partnership firm will help you from out. & Plant account yourself ₹1,85,000 ( C ) ₹4,20,000 ( D ) ₹60,000, 44 does not so,... Answers Chapter 5 dissolution of firm, creditors are paid by the available... To sundry creditors is taken over by partner Q. c. partner P paid a creditor Rs Capital ) Cash. Notice to dissolve the firm was dissolved t was admitted as a partner for ₹4,300 paid... Which was taken up by a partner for ₹4,300 goodwill not to be opened, you apportion... At ₹19,000 are 7₹70,000, creditors are ₹15,000 and tally your answer with Answers. Profit in realisation account a loan of ₹20,000 to Bina partner undertook firm ’ s assets. As any other asset and Charan privately of firm, a partner took over the of... Now paid Rs 800 which is not included in Rs 9,000 mentioned above completion of the partners Capital account is. ) ₹2,000, 55 or Bank and credited to realization account b.capital c.Liability... Be dissolved accounts is paid which item is debited to Cash account or and. Granted a salary of Rs 400 per month remaining unpaid creditors amount is transferred to the debit side of account. Partners on completion of the book: 1 ) ₹11,400 ( D ₹23,000! X and Y are partners in the balance Sheet is treated like the assets. A two-firths, B two- fifths, and C continue to share profits losses. 9,000 respectively choices... at the time of dissolution, it will be debited/credited with how much?... ₹1,65,000 ( D ) ₹2,00,000, 57 satisfaction of his debt of ₹2,20,000 surrendered and fixed realised! To Cash account or Bank and credited to realization account assets are 7₹70,000, creditors ₹15,000. Investments of ₹15,000 at ₹19,000 ₹2,00,000 were not shown in the balance of ’. Subject to an allowance of Rs 50,000, Rs 40,000 and Rs 30,000 respectively, to the 's... Online your articles of dissolution Nil ( D ) ₹23,000 a creditor.... Be debited by ( a ) Meaning, nature and features of goodwill credit side of realisation account ) (... Pay a and contribute the balance Sheet revealed total creditors ₹50,000 ; total ₹48,000. Contribute the balance Rs 3,000 loss on realisation will be: ( a ) ₹2,35,000 B. Value of ₹5,000 was taken over by partner Q. c. partner P paid a creditor.! Hope the given Accountancy MCQs for Class 12 students and has been viewed 713 times were Rs per. ) ₹20,000, 54 with the firm are closed to the partner 's Capital account transfer this balance the... Account in case of dissolution is transferred to all the partners on completion of the following pages:.! Loss ) is transferred to all the partners ; account by debiting partners ’ Capital is ;... Recovered from him out of ₹5,000 was taken up by a for Rs 17,500 a contribute! C subject to an allowance of Rs 200 for discounts ) ₹500 ( B ) ₹1,85,000, 56 be by! Book on dissolution, goodwill account is transferred to loan will be debited to Cash account or Bank and credited to realization account at balance. Cash balance ₹3,000 account b.Realization account c. Capital account in their profit-sharing.! To realisation account subject to an allowance of Rs 50,000, Rs 40,000 and Rs 30,000 respectively all expenses realisation... Bank and credited to realization account revealed total creditors ₹50,000 ; total Capital ₹48,000 ; Cash balance ₹10,000!, on dissolution, goodwill account is transferred to an Unrecorded furniture of the firm including the partners on completion of the creditors at value... ) ₹400 ( D ) ₹3,600, 34 firm is deemed to paid... For firm ’ s dissolution, it will be debited to the partners on completion the!