CBSE Class 12 Accountancy Dissolution Of Partnership Firm Worksheet Set B

Question. A partnership firm is compulsorily dissolved) :
(a) When the business of the firm is declared illegal
(b) When a partner of the firm dies
(c) When a partner of the firm becomes insolvent
(d) When a partner transfers his share to some other person without the consent of other partners

Answer: A

Question. Sundry Creditors amounted to Rs.8,000. These were paid at a discount of 5%.
Realisation account will be debited by
(a) Rs.8,000
(b) Rs.7,600
(c) Rs.400
(d) Rs. 8,400

Answer: B

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. When a Partner dies, amount due to him will be paid to:
(a) Gainer partner
(b) His Executor
(c) Remaining Partners
(d) None of the options

Answer: B

Question. 30.Sundry creditors amounted to ₹ 8,000. They were paid at a discount of 5 %. Realisation A/c will be debited by :
(a) ₹ 8,000
(b) ₹ 7,600
(c) ₹ 400
(d) ₹ 8,400

Answer: B

Question. P, a partner, is to bear all expenses of realisation for which he is to be paid Rs.2,000. P had to pay realisation expenses of Rs.2,500. How much amount will be debited to Realisation Account?
(a) Rs.500
(b) Rs.2,500
(c) Rs.4,500
(d) Rs.2,000

Answer: D

Question. On dissolution of the firm, amount received from sale of unrecorded asset is credited to :
(a) Partner’s Capital Accounts
(b) Profit and Loss Account
(c) Realisation Account
(d) Cash Account

Answer: C

Question. At the time of dissolution^ partner gives his personal asset to firm's creditor in settlement, the account credited will be
(a) Realisation A/c.
(b) Partner's Capital A/c.
(c) Cash A/c.
(d) Creditor's A/c.

Answer: B

Question. In case of dissolution, assets are transferred to Realisation Account:
(a) At Market Value
(b) Cost or Market Value, whichever is lower
(c) At Book Value
(d) None of the Above

Answer: C

Question. After transferring liabilities like creditors and bills payables in the realisation account, in the absence of any information regarding then payment, such liabilities are treated as
(a) Fully paid
(b) Partly paid
(c) Never Paid
(d) None of the options

Answer: A

Question. On dissolution of the firm, partners capital accounts are closed through
(a) Bank account
(b) Drawings account
(c) Realisation account
(d) Partners capital account

Answer: A

Question. W, X, Y and Z are equal partners, W, X and Z died together in plane crash, this accidents results in
(a) Dissolution of partnership
(b) Dissolution of partnership as well as firm
(c) Dissolution of firm
(d) None of the options

Answer: B

Question. Anukalp and Karan are partners with the capital of Rs. 25000 and 15000 respectively, Interest payable on capital is 10% P.A, find the Interest on capital for both the partners when the profits earned by the firm is Rs 2400
(a) 1500 and 900
(b) 2500 and 1500
(c) 1200 and 1500
(d) None of the options

Answer: A

Question. Calculate on interest on drawing @ 12% p.a for Abhishek if he withdraw Rs. 2000 once in month
(a) 1220
(b) 1320
(c) 1440
(d) 1300

Answer: C

Question. On firm’s dissolution, a partner undertook firm’s creditors at Rs. 17,000. In this case the account will be credited :
(a) Creditors A/c
(b) Cash A/c
(c) Realisation A/c
(d) Partner’s Capital A/c

Answer: D

Question. Change in the existing agreement between the partners is called :
(a) Dissolution of Firm
(b) Dissolution of Partnership
(c) Dissolution of Business
(d) All of the Above

Answer: B

Question. There was an Unrecorded asset of Rs.2,000 which was taken over by a partner at Rs. 1,500. Partner’s Capital Account will be debited by ............
(a) Rs.2,000
(b) Rs. 1,500
(c) Rs.500
(d) Rs.3,500

Answer: B

Question. On dissolution of a firm, a partner’s capital account has a credit balance of Rs.42,000. His share of profit in realisation account is Rs. 9,000. He has paid firm’s realisation expenses Rs.3,000. He will finally get a payment of:
(a) Rs.39,000
(b) Rs.42,000
(c) Rs.54,000
(d) Rs.48,000

Answer: C

Question. On dissolution, if a partner pays firm's liability which ofthe following account is debited?
(a) Profit and Loss Account
(b) Realisation Account.
(c) Partner's Capital Account
(d) Cash Account

Answer: B

Question. Investments of Rs. 2,00,000 were not shown in the books. One of the creditors took these investments in settlement of his debt of Rs. 2,20,000. How much amount will be payable to that creditor?
(a) Rs. 20,000
(b) Rs. 2,20,000
(c) Rs. 4,20,000
(d) Nil

Answer: D

Question. Which of the following is transferred to Realisation Account :
(a) Balance of Cash Account
(b) Balance of Profit & Loss Account
(c) Amount realised on sale of assets
(d) Reserves

Answer: C

Question. Distinguish between “Dissolution of Partnership’’ and ‘Dissolution of Partnership Firm” on the basis of settlement of accounts.
Answer: In case of Dissolution of Partnership assets are revalued and liabilities are reassessed where as in case of Dissolution of Firm all assets are sold off except cash and liabilities are paid .

Question. In case of dissolution of a firm which liabilities are to be paid first?
Answer: Debt of third parties

Question. If total assets are Rs 2,00,000; total liabilities are Rs 40,000; amount realized on sale of assets is Rs 1,75,000 and realization expenses are Rs 3,000,what will be the profit or loss on realization?
Answer: Loss Rs 28,000 (Realisation A/c Debit 2,43,000 Credit 2,15,000, difference of debit and credit= 28000(loss)

Question. In the event of dissolution of a partnership firm, where is provision for doubtful debts transferrd?
Answer: On the credit side of Realisation Account.

Question. State any one occasion for the dissolution of the firm on court’s order when a partner becomes.
Answer: Partner becomes permanently incapable of performing his duties as a partner.

Question. How much amount will be paid to creditors for Rs 25,000 if Rs 5,000 of the creditors are not to be paid and the remaining creditors agreed to accept 5% less amount?
Answer: Rs 19000 ( Creditors to be paid 25000- 5000= 20,000; Amount paid= 20,000- 5% of 20,000)

Question. Name the assets that are not transferred to the debit side of Realisation Account, but brings certain amount of cash against its disposal at the time of dissolution of the firm.
Answer: Unrecorded Assets.

Question. If creditors are Rs 25,000, capital is Rs 1,50,000 and cash balance is Rs 10,000, what will be amount of sundry assets?
Answer: 1,65,000 ( Sundry Assets= Creditors +Capital -Cash balance)

Question. In case of dissolution,where are general reserves and accumulated profits and losses transferred?
Answer: In partner’s Capital Accounts in their profit sharing ratio.

Question. Mention one difference between Realisation and Revaluation Account.
Answer: Realisation Account is prepared at the time of dissolution of firm where as Revaluation Account is prepared at the time of admission/retirement/death of a partner.

Question. How much amount will be paid to A, if his opening capital is Rs 2,00,000 and his share of realization Answer: Rs 2,000 ( opening capital +realisation profit – asset taken over)

Question. Give any one difference between reconstitution of firm and dissolution of a firm.
Answer: Reconstitution of firm means change in the existing agreement between partners, whereas dissolution of firm means dissolution of partnership between all partners of the firm.

Question. On dissolution of a firm, where are assets shown in Balance Sheet transferred?
Answer: On the Debit side of Realisation Account.

Question. On dissolution of a firm ,where is cash in hand transferred?
Answer: On the debit side of Cash Account.

Question. A and B are partners in a firm .Their firm was dissolved on 1.1.2019. A was assigned the work of dissolution. For this work, A was to be paid Rs 500. A paid dissolution expenses from his own pocket. Will any journal entry be passed for Rs 400 paid by A? If yes, pass the entry, If no, give reason
Answer: Yes, journal entry will be passed.
Realisation A/c Dr. 400
To A’s Capital A/c 400
(being realization expenses paid by A on firm’s behalf)

Question. On dissolution, patents appearing in the balance sheet is transferred to which account?
Answer: Realisation Account.

Question. List any four modes of dissolution of partnership firm.
Answer: Dissolution by agreement, Compulsory dissolution, Dissolution by Court, Dissolution by notice in case of partnership at will.

Question. In case of dissolution of a firm, which item on the liabilities is to be paid last?
Answer: Partner’s Capital

Question. Creditors of Rs 50,000 took over stock at an agreed value of Rs 45,000 and the balance was paid to him. Pass the necessary journal entry.
Answer: For stock taken over by creditor no Journal entry , for the balance paid the entry will be
Realisation A/c Dr. 5000
To bank A/c 5000
(being balance of creditors settled for cash)

Question. The firm of Ravi and Mohan was dissolved om 31.03.2019. According to the agreement ,Ravi had agreed to undertake the dissolution work for an agreed remuneration of Rs 2,000 and bear all realization expenses. Dissolution expenses were Rs 1500 and the same were paid by the firm. Pass necessary journal entries.
Answer:  (i) Realisation A/c Dr. 2000
To Ravi’s Capital A/c 2000
(remuneration due to Ravi)
(ii) Ravi’s Capital A/c Dr. 1500
To bank A/c 1500
(realization expenses paid on behalf of Ravi)

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