CBSE Class 12 Accountancy Dissolution Of Partnership Firm MCQs Set F

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: c

Question: At the time of dissolution of a firm, Debtors were Rs. 17,000 out of which 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 and Loss Account by Rs. 500.
c) Cash Account by Rs. 9,900
d) Debtors Account by Rs. 7,100.
Answer: c

Question: Court can make an order to dissolve the firm when :
a) Some partner has become fully mad
b) Partnership deed is fully followed
c) Continued future profits are expected
d) Firm is running legal business
Answer: a

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: b

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: b

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: d

Question: Amount received from sale of unrecorded asset at the time of dissolution of the firm is credited to
a) Partners’ Capital Accounts.
b) Profit and Loss Account.
c) Realisation Account.
d) Cash Account.
Answer: c

Question: Why a new partner is admitted in the firm?
a) For Increase the Number of partners
b) For Increase the Profit sharing Ratio
c) None of the options
d) For Increase the Capital of the firm.
Answer: d

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: a

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: c

Question: At the time of dissolution of firm, Loan given by partner to the firm is paid out of the amount realised on sale of assets
a) after payment of outside liabilities but before repayment of capital.
b) after payment of capital of partners.
c) after payment of outside liabilities or capital.
d) before payment of outside liabilities.
Answer: a

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: c

Question: On dissolution of a firm, on realisation of goodwill (which was shown in Balance Sheet) will be credited to :
a) Cash A/c
b) Realisation A/c
c) Profit & Loss A/c
d) None of the A/c
Answer: b

Question: While preparing memorandum Balance Sheet if the Asset side is more than the Liabilities side & Partners Capital is already appearing on the Liabilities side, the balancing figure will be :-
a) Profit and Loss (Dr.)
b) Creditors
c) Furniture
d) Cash
Answer: b

Question: On dissolution of a firm, out of the proceeds received from the sale of assets ………… will be paid first of all
a) Partner’s Capital
b) Partner’s Loan to Firm
c) Partner’s additional capital
d) Outside Creditors
Answer: d

Question: Which is the main right of a partner?
a) Share the Profits of the firm.
b) Stop other partners for drawings
c) Share the old profits of the firm
d) All of the options
Answer: a

Question: At the time of dissolution of partnership firm, Deferred Revenue Expenditure (Advertisement Expenditure) is transferred to
a) Capital Accounts of Partners.
b) Realisation Account.
c) Cash Account.
d) Loan by Partner Account.
Answer: a

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: c

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 Salary A/C
c) Transferred to partners Capital A/C
d) None of the options
Answer: c

Question: Why is realisation account prepared
a) Opening the account
b) For profit sharing
c) None of the options
d) Closing the accounts
Answer: d 

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) Remain same
b) No change
c) Decrease
d) Reduce
Answer: d

Question: Dissolution of the firm means
a) Business of the firms ends
b) Assets Sold
c) All of the options
d) Liabilities paid
Answer: c

Question: On dissolution goodwill realised shown in balance sheet is recorded as :-
a) Bank/cash A/c Dr., To Realisation A/c
b) Partner’s Capital A/c Dr., To Bank/Cash A/c
c) Realisation A/c Dr., To Bank/Cash A/c
d) Realisation A/c Dr., To Bank/Cash A/c
Answer: a

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: a

Question: Unrecorded assets when realised is credit to
a) Partners capital A/c
b) Current Account
c) Realisation A/c
d) None of the options
Answer: c

Question: At the time of dissolution of the firm, if goodwill appears in the balance sheet, it is transferred to
a) Realisation A/c
b) Revaluation A/c
c) Capital A/c
d) Current Account
Answer: a

Question: Realisation expenses of Rs. 7,000 were to be paid by the partner. The firm will be paying him a remuneration of Rs. 7,500 for the dissolution work. The Partner’s Capital Account will be credited with and Rs. :-
a) Rs. 7,500
b) Rs. 14,500
c) Rs. 7,000
d) Rs. 7,300
Answer: a

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: a

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: a

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: a

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: a

Question: According to Section 30 of Partnership Act 1932:
a) New partner will bring capital and goodwill in cash
b) A Minor can be admitted as a partner by the consent of all partners for the time being.
c) New partner will inspect the books of accounts
d) New partner is allowed to share old profits
Answer: b

Question: The modes by which a firm may be dissolved are
a) By Mutual agreement
b) Compulsory Dissolution
c) All of the options
d) By Notice
Answer: c

Question: At the time of admission of a new partner, the new partner acquires his share from the old partners in the:
a) New Ratio
b) New Ratio
c) Sacrificing ratio
d) Old ratio
Answer: c

Question: ‘A’ one of the Partners was to bear all the Realisation Expenses for which he was given a commission of 3% of net cash realised from Dissolution. Cash realised from Assets was Rs. 25,000. Amount paid for paying off liabilities amounted to Rs. 5,000. The amount of commission will be:-
a) Rs. 750
b) Rs. 150
c) Rs. 800
d) Rs. 600
Answer: d

Question: At the time of dissolution of the firm, the assets and liabilities appearing in the balance sheet are transferred to
a) Realisation A/c
b) Real Account
c) Capital A/c
d) None of the options
Answer: a

Question: There were investment worth Rs. 1,20,000, 75% of the investment were taken over by a Partner at 75% of their book value. The value at which the investment are taken over is:-
a) Rs. 90,000
b) Rs. 67,500
c) Rs. 80,000
d) Rs. 65,000
Answer: b

Question: at the time of dissolution of firm, loan from partner is
a) Transferred to realisation A/transferred to partners capital A/c
b) None of the options
c) Not transferred to realisation A/c
Answer: c

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: a

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: a

Question: 50% of the Furniture valued at Rs. 20,000, taken by a Partner at Rs. 18,000, and remaining 50% will be sold at 20% less than the book value, amount transferred to Bank Account will be:-
a) Rs. 20,000
b) Rs. 10,000
c) Rs. 16,000
d) Rs. 18,000
Answer: c

Question: When Realisation expenses are paid by a partner on behalf of the firm, Partner’s Capital Account will be________.
Answer: Credited

Question: Realisation Account is ______
Answer: _in nature.Nominal

Question: Profit on realisation is credited to Partner’s Capital Account in their ______________.
Answer: Profit-Sharing Ratio

Question: A firm may be compulsory dissolved when all the partners or all the partners except one become _________.
Answer: Insolvent

Question: Firm’s Property is applied first for settling ____________.
Answer: Firm’s debts

Question: Dissolution of Partnership means change in existing relations of the partnersX
Answer: True

Question: Change in Business Relationship among the Partner’s is Dissolution of Partnership
Answer: True

Question: When the business of the firm is unlawful then it is compulsory Dissolved.
Answer: True

Question: Assets having provisions are recorded in Realisation Account at its net value. F
Answer: False

Question: Partners Loan is an outside Liability
Answer: False

Question:
1 Dissolution of Partnership which account is prepared              a) Profit and loss account
2 Dissolution of Partnership firm which account is prepared :     b) Realisation account
                                                                                                     c) Revaluation account
                                                                                                      d) Profit and loss Appropriation account
Answer: [ 1 – c ; 2 – b ]

Question:
1 At the time of dissolution of a Partnership firm Partners Capital account will closed by     a) Realisation account
2 At the time of dissolution of a Partnership firm Partner loan account will be closed by      b) Partner current account
                                                                                                                                               c) Partners Capital account
                                                                                                                                                d) Bank account
Answer: [ 1-d; 2- d ]