CBSE Class 12 Accountancy Dissolution Of Partnership Firm MCQs Set E

Question: On dissolution of partnership firm the personal debt of a partner will be paid out of :-
a) Partners personal asset
b) Firm profit
c) Both Partners personal asset and Firm profit
d) All of the options
Answer: a

Question: Partners loan Account is not transferred to :-
a) Bank Account
b) Realisation Account
c) Partners loan Account
d) None of the options
Answer: b

Question: If a partner undertakes to pay the liability of a firm on dissolution it will be recorded as :-
a) Realisation A/c Dr., To Bank/Cash A/c
b) Realisation A/c Dr., To Partners Capital A/c
c) Bank/Cash Dr., To Partners Capital A/c
d) None of the options
Answer: b

Question: Nature of realisation Account :-
a) Nominal Account
b) Real Account
c) Personal Account
d) None of the options
Answer: a

Question: If a partner has taken some of the Sundry Asset at Rs. 7,200 (being 10% less than book value) its book value is :-
a) Rs. 7,920
b) Rs. 8,000
c) Rs. 7,200
d) Rs. 7,000
Answer: b

Question: Accumulated Profit/Loss are transferred to Partner’s Capital Account in case of dissolution in their :-
a) New Ratio
b) Gaining Ratio
c) Profit Sharing Ratio
d) None of the options
Answer: c

Question: On dissolution advertisement suspense appearing in balance sheet is shown in :-
a) Realisation Account
b) Partner’s Capital Account
c) Bank Account
d) Revaluation Account
Answer: b

Question: Section 48 of the Indian partnership act 1932 deals with :-
a) Payment of firms debts and private debts
b) Settlement of account when the firm is dissolved
c) Dissolution of the firm
d) Liability of partners
Answer: b

Question: When Realisation expenses are borne & paid by the same partner :-
a) No entry will be passed
b) Realisation Account will be debited, Cash Account will be credited
c) None of above
d) Bank A/c Dr. To Realisation A/c
Answer: a

Question: Change in existing agreement between Partners is called :-
a) Dissolution of Partnership
b) Dissolution of Partnership Firm
c) Admission of a Partner
d) Death of a Partner
Answer: a

Question: On Dissolution goodwill Account is transferred to :-
a) Credit side of Bank Account
b) Debit side of Partners Capital Account
c) Debit side of Realisation Account
d) Credit side of Realisation Account
Answer: c

Question: Liabilities to third parties in case of dissolution of partnership firm do not include :-
a) Reserves
b) Credit Balance of P&L Account
c) Partners loan
d) All of the options
Answer: d

Question: Court may pass order of the dissolution of the firm where :-
a) Expiry of the term for which the firm was constituted
b) When the business of the firm can’t be carried on except at a loss
c) On completion of the venture
d) On mutual agreement
Answer: b

Question: Nature of bank Account is :-
a) Artificial Personal Account
b) Natural Personal Account
c) Representative Personal Account
d) Nominal Account
Answer: a

Question: Liability which is not shown in balance sheet but paid at the time of dissolution :-
a) Outstanding Expenses
b) Bills payable
c) Unrecorded liability
d) Reserves
Answer: c

Question: Dissolution of the Partnership does not include :-
a) Admission of a partner
b) Death of a partner
c) Change in Profit-Sharing Ratio
d) Dissolution of firm
Answer: d

Question: Third party liabilities are shown in Realisation Account :-
a) Debits side of Realisation Account
b) Credit side of Realisation Account
c) Debit side of Partner Capital Account
d) Credit side of Partner Capital Account
Answer: b

Question: If WCR was not given in balance sheet & liability arises of Rs. 10,000, the Journal Entry will be :-
a) WCR A/c Dr., To Partner Capital A/c
b) Realisation A/c Dr., To Bank A/c
c) Bank A/c Dr., To Realisation A/c
d) No Entry
Answer: b

Question: Partners Loan Account is :-
a) Personal Account
b) Real Account
c) Nominal Account
d) Artificial Account
Answer: a

Question: Dissolution of the Partnership firm means :-
a) Change in existing ratio of partners
b) Dissolution of Partnership among all partners
c) Death of a Partner
d) Dissolution of firm
Answer: b

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: b

Question: If creditors are Rs.25,000, capital is Rs.1,50,000 and cash balance is Rs.10,000, what will be the amount of sundry assets?
a) Rs.1,75,000
b) Rs.1,85,000
c) Rs.1,65,000
d) Rs.1,40,000
Answer: c

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: c

Question: On payment of expenses of dissolution, account will be debited:
a) Realisation Account
b) Cash Account
c) Profit & Loss Account
d) None of the options
Answer: a

Question: On dissolution of firm, loss calculated 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: b

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: a

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: d

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 options
Answer: c

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) Debit side of Capital account of all the partners
b) Credit side of Capital account of all the partners
c) Both
d) None of the options
Answer: b

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: c

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: b

Question: Bad debts recovered will be recorded in:
a) Cr. Side of Revaluation Account
b) Dr. Side of Revaluation Account
c) Both
d) None of the options
Answer: a

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: a

Question: Which of the following item is not shown in the credit side of deceased partner’s capital account?
a) Share of loss
b) Share of profit
c) Revaluation profit
d) All of the options
Answer: a

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: c

Question: On dissolution of a firm, partners’ capital accounts balance was Rs.63,000; creditors balance was Rs.12,000 and profit & loss account debit balance was Rs.6,000. Profit on realisation of assets was Rs.7,800. Total amount realised from assets was:
a) Rs.81,000
b) Rs.76,800
c) Rs.70,800
d) None
Answer: b

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 Partner
d) None of the options
Answer: c

Question: Investments valued Rs.2,00,000 were not shown in the books. One of the creditors took over these investments in full satisfaction of his debt of Rs.2,20,000. How much amount will be deducted from creditors?
a) Rs.20,000
b) Rs.2,20,000
c) Rs.4,20,000
d) Rs.2,00,000
Answer: b

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: a

Question: In case of dissolution of the partnership firm, Provision for Doubtful Debts is transferred to __________Account.
Answer: Realisation

Question: Dissolution of Partnership may or may not involve ___________ of the firm.
Answer:Dissolution

Question: When any asset is taken by the partner at the time of dissolution of the partnership firm then______
Answer: Account will be debited. Partner’s Capital

Question: Asset taken by a partner at the time of dissolution is_______
Answer: to partner’s capital Account.

Question: Loss of realization Account is debited to Partner’s Capital Account is the __________.
Answer: Profit-Sharing Ratio

Question: Dissolution of Partnership is different from Dissolution of Partnership Firm.
Answer: True

Question: The court can order the Dissolution of a Partnership Firm, if any of the partners become a person of unsound mind
Answer:True

Question: When the Expenses are borne and paid by the Partner out of his own pocket. Then Journal Entry for realization expenses is passed
Answer: False

Question: For paying off firm’s debts all partners are jointly and separately liable to pay.
Answer: True

Question: Partner’s Loan Account is transferred to Realisation Account.
Answer: False

Question:
1 Bank overdraft will be transferred to :         a) Partners Capital account
2 Bank loan will be transferred to :                b) Partners current account
                                                                      c) Bank account
                                                                      d) Realisation account
Answer: [ 1 – d ; 2 – d ]