CBSE Class 12 Accountancy Dissolution Of Partnership Firm Worksheet Set 01

MCQ Questions for NCERT Class 12 Accountancy Dissolution Of Partnership Firm 

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 A/c
(b) Transferring it to credit side of Realisation A/c
(c) Transferring it to debit side of Bina’s capital account
(d) Bina paying Anu and Charan privately 

Answer: C

Question: After settlement of dissolving firm, bank account may have_________ balance.
(a) Debit
(b) credit
(c) overdraft
(d) nil   

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 payment to third party loan
(b) Before making 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 above 

Answer: C

Question: Goodwill already appearing in the balance sheet of the firm will be transferred on the ______ side of _________ account
(a) Debit, capital
(b) debit, realization
(c) debit, bank
(d) credit , bank 

Answer: B

Question: On dissolution of the firm, partner’s capital accounts are closed through
(a) Realisation a/c
(b) Drawings a/c
(c) bank a/c
(d) loan a/c 

Answer: C

Question:  On firm’s dissolution , when a partner voluntarily gives his personal asset to firm’s creditor as payment, the account credited will be
(a) Realization A/c
(b) Partner’s Capital A/c
(c) Cash A/c
(d) None of the A/c 

Answer: D

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: At the time of dissolution of firm,’ loan of partners’(loans given by partners to the firm) is paid out of the amount realized on sale of assets:
(a) After making the payment of loans given by third party
(b) After making payment of balance of Capital Accounts of partners
(c) After making the payment of above (a) and (b)
(d) Before the payment of loans given by third party 

Answer: A

Question: On dissolution of a firm, Realisation A/c is debited with
(a) All the liabilities of the firm
(b) cash received on the sale of assets
(c ) Any asset taken over by one of the partners
(d) All assets to be realized 

Answer: D

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. Amount realised from sale of assets is recorded on the ……… side of cash/bank account.
a) debit
b) credit
c) not shown in cash/bank account
d) None of these

Answer : A

Question. On dissolution, realisation account is debited with
a) all assets
b) all assets to be realised
c) all liabilities
d) all liabilities to be paid

Answer : B

Question. On the basis of the following data, how much final payment will be made to a partner on firm’s dissolution? Credit balance of capital account of the partner was Rs 50,000. Share of loss on realisation amounted to Rs 10,000. Firm’s liability taken over by him was for Rs 8,000.
a)Rs 32,000
b) Rs 48,000
c) Rs 40,000
d) Rs 52,000

Answer : B

Question. Partners may dissolve a firm by mutual agreement. This is specified in Section ……… of the Act.
a) 39
b) 40
c) 41
d) 42

Answer : B

Question. The firm of A and B was dissolved on 31st March, 2020. According to the agreement, B had agreed to undertake the dissolution work for an agreed remuneration of Rs 8,000 and bear all the realisation expenses. Dissolution expenses were Rs 5,000. The journal entry passed will be
a) Realisation A/c               Dr                5,000
               To Bank A/c                                        5,000
b) Realisation A/c               Dr                8,000
              To Bank A/c                                         8,000
c) Realisation A/c               Dr                5,000
              To B’s Capital A/c                                 5,000
d) Realisation A/c               Dr                8,000
              To B’s Capital A/c                                 8,000

Answer : D

Question. On dissolution of a firm, bank overdraft is transferred to
a) cash account
b) bank account
c) realisation account
d) partners’ capital accounts

Answer : C

Question. When realisation expenses are paid by the firm on behalf of a partner, such expenses are debited to
a) realisation account
b) partners’ capital accounts
c) partners’ loan accounts
d) None of the above

Answer : D

Question. Court cannot pass the order to dissolve the firm, when ……… .
a) partners become incapable permanently
b) partnership agreement persistently followed by partners
c) business of the firm cannot be carried except at a loss
d) partner transfer whole of its interest to a third party

Answer : B

Question. Dissolution of partnership between all partners of firm is called
a) dissolution of firm
b) dissolution of partnership
c) dissolution of firm name
d) None of the above

Answer : A

Question. Unrecorded assets when taken over by a partner are shown in
a) debit side of realisation account
b) debit side of bank account
c) credit side of realisation account
d) credit side of bank account

Answer : C

Question. P and Q are partners in a firm. They decided to dissolve the firm. Assets other than cash Rs1,60,000, cash Rs25,000, total liabilities Rs 1,75,000. On dissolution, assets realised Rs1,25,000 and liabilities paid Rs1,40,000. Net profit or loss on realisation is
a) profit Rs25,000
b) loss Rs25,000
c) loss Rs15,000
d) no profit, no loss

Answer : D

Question. The accumulated profits and reserves are transferred to
a) realisation account
b) partners’ capital accounts
c) bank account
d) None of the above

Answer : B

Question. Rishabh and Vansh are partners in a firm sharing profits in the ratio of 3 : 2. Mrs. Rishabh has given a loan of Rs 20,000 to the firm and the firm has also taken a loan from Vansh of Rs 15,000. The firm was resolved and its assets were realised for Rs 30,000. To whom company will repay if there were no other creditors of the firm?
a) First repay Rs 15,000 to Mr. Vansh
b) First repay Rs 20,000 to Mrs. Rishabh
c) Repay Rs 15,000 each
d) Repay in the ratio of 4:3

Answer : B

Question. On dissolution of the firm, partner’s capital accounts are closed through
a) realisation account
b) drawings account
c) bank account
d) loan account

Answer : C

Question. In the event of dissolution of a firm, the partners’ personal assets are first applied for payment of …… .
a) the personal liabilities
b) the firm’s liabilities
c) Both (a) and (b)
d) preferential tax liabilities

Answer : A

Question. On firm’s dissolution, a partner A took over 50% of the stock at a discount of 20% (book value of stock was Rs 5,00,000). What will be the value of taken over stock?
a) Rs 2,50,000
b) Rs 1,00,000
c) Rs 2,00,000
d) Rs 5,00,000

Answer : C

Question. Which of the statements is/are correct?
(i) Dissolution of firm is a subset of dissolution of partnership.
(ii) When firm’s goodwill is taken over by a partner at the time of dissolution, it is not recorded in the books.
Alternatives
a) Only (i)
b) Only (ii)
c) Both (a) and (b)
d) None of these

Answer : D

Question. After transferring liabilities like creditors and bills payables in the realisation account, in the absence of any information regarding the payment, such liabilities are treated as
a) never paid
b) fully paid
c) partly paid
d) None of these

Answer : B

Question. On the dissolution of the firm, realisation account is closed through
a) bank account
b) partners’ capital account
c) loan account
d) drawings account

Answer : B

Question. Unrecorded liabilities when paid are shown in
a) debit side of realisation account
b) debit side of bank account
c) credit side of realisation account
d) credit side of bank account

Answer : A

Question.  What journal entry will be passed if remuneration expenses of Rs 5,450 were to be borne by Rajesh, however it is paid by Sanjana?
a) Sanjana’s Capital A/c               Dr   5,450
              To Bank A/c                                     5,450
b)Rajesh’s Capital A/c                  Dr   5,450
              To Sanjana’s Capital A/c                   5,450
c) Sanjana’s Capital A/c                Dr   5,450
              To Rajesh’s Capital A/c                     5,450
d)Rajesh’s Capital A/c                   Dr   5,450
              To Bank A/c                                     5,450

Answer : B

Question. When an unrecorded asset is realised at the time of dissolution of the firm, ............. account is debited and ................ account is credited.
a) realisation, cash
b) concerned partner account, cash
c) cash, realisation
d) realisation, concerned partner account

Answer : C

Question.  Amit, Barun and Chanda are partners. They decided to dissolve the firm. There is a debit balance of Rs 27,000 in the profit and loss account on the date of dissolution. What journal entry would be passed?
a) Profit and Loss A/c                 Dr        27,000
           To Amit’s Capital A/c                            9,000
           To Barun’s Capital A/c                          9,000
           To Chanda’s Capital A/c                        9,000
b) Amit’s Capital A/c                   Dr        9,000
     Barun’s Capital A/c                Dr        9,000
    Chanda’s Capital A/c               Dr        9,000
           To Profit and Loss A/c                            27,000
c) No entry
d)None of the above

Answer : B

Question.  Jhunjhun, a partner paid loan of the firm of Rs 1,00,000 at the time of dissolution. Pass the journal entry for this transaction.
a) Jhunjhun’s Capital A/c             Dr          1,00,000
             To Realisation A/c                                       1,00,000
b) Realisation A/c                       Dr           1,00,000
             To Loan A/c                                                1,00,000
c) Realisation A/c                        Dr          1,00,000
             To Jhunjhun’s Capital A/c                             1,00,000
d)None of the above

Answer : C

Question. Realisation account is prepared at the time of …… .
a) admission of a partner
b) change in profit sharing ratio
c) dissolution of a firm
d) dissolution of partnership only

Answer : C

Question. On dissolution of a firm, partner’s loan account is transferred to
a) realisation account
b) partners’ capital accounts
c) partners’ current accounts
d) None of the above

Answer : D

Question. At the time of dissolution of a partnership firm, the provision for doubtful debts is transferred to which account?
a) Realisation account
b) Partner’s capital account
c) Cash account
d) None of the above

Answer : A

Question. If the debit side of realisation account exceeds the credit side, then it signifies
a) profit on realisation
b) loss on realisation
c) neither profit nor loss
d) None of these

Answer : B

Question.  At the time of dissolution of partnership firm, journal entry for the settlement of loan advanced by the firm to a partner would be
a) Bank A/c                           Dr
         To Loan to Partner A/c
b) Loan to Partner A/c            Dr
         To Bank A/c
c) Realisation A/c                   Dr
         To Loan to Partner A/c
d) All of the above

Answer : A

 Fill in the blanks:

Question: No entry is required when any __________ accepts fixed assets in lieu of his balance(due).
Answer: creditor

Question: Provision for doubtful debts is transferred on the __________ side of _________ account, in case of dissolution.
Answer: Credit, realisation

Question: Partner’s loan on the asset side is transferred on the _______ side of ______account.
Answer: Debit, capital

Question: Under partnership at __________, any partner may ask for dissolution of the firm.
Answer: will

Question: _____ debts are paid by the firm through firm’s _________ at the time of dissolution.
Answer: Firm’s, assets

Question: At the time of dissolution, after settling all the accounts ________ account automatically closed.
Answer: Cash/Bank

Question: At the time of dissolution, loan from partner’s relative is transferred to ______ account.
Answer: Realisation

Question: If the question is silent about settlement of any liability, it is assumed that amount _________ to ___________ is paid.
Answer:Equal, book value

Question: Workmen Compensation Reserve was nil and liability was Rs. 15000. In such a situation _________ account is debited and _________ account is credited.
Answer:  Realisation , Bank

Question: Debtors Rs. 2,64,000, Provision for Doubtful Debts Rs. 24,000, Rs. 48000 of the book debts proved bad. The amount realized from debtors is ___________.
Answer: 21,600

Match the column :

1. Dissolution of a firm which, on any ground, is regarded to be just and equitable                            A. Dissolution on the happening of certain contingencies
2. Dissolution of a firm by the death of a partner, subject to contract between the partners.               B. Dissolution by court
3. Dissolution of a firm when some event has taken place which makes it unlawful for the partners.    C. Compulsory Dissolution
4. Dissolution of a firm in accordance with a contract between the partner                                         D. Dissolution by Agreement                                                                                                                                                                                                                                            
Answer: 1- B, 2- A , 3-C , 4-D