CBSE Class 12 Accountancy Dissolution of Partnership Firm Advanced Questions

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

Answer: a

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

Answer: c

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 above.

Answer: c

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: Give circumstances under which the fixed capitals of partners may change
a) Both
b) When fresh capital is introduced by the partner
c) When a part of capital is withdrawn by the partner
d) None of the options

Answer: a

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 Book Value
b) At Market Value
c) Cost or Market Value, whichever is lower
d) None of the Above

Answer: a

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

Answer: a

Question: Except outgoing partner, which other partner can be credited at the time of settlement of goodwill amount?
a) Sacrificing partner
b) Gaining partner
c) All the partners
d) None of the options

Answer: a

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

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 the firm, partners capital accounts are closed through
a) Bank account
b) Drawings account
c) Realisation account
d) Partners capital account

Answer: a

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, if a partner undertakes to make payment of a liability of the firm, the account to be debited is:
a) profit & Loss Account
b) Realisation Account
c) Partner’s Capital Account
d) Cash 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: Unrecorded assets when realised is credit to
a) Realisation A/c
b) Partners capital A/c
c) Current Account
d) None of the options

Answer: a

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 Partnei
d) None of the Above

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: ............ is prepared at the time of dissolution :
a) Revaluation Account
b) Profit & Loss Account
c) Profit and Loss Appropriation Account
d) Realisation Account

Answer: d

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

Answer: a

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: Revaluation Account is also known as ________
a) Asset Account
b) Profit and Loss Adjustment Account
c) Profit and Loss Account
d) None of the options

Answer: b

Question: On dissolution of the firm , all assets are transferred to realisation account at
a) Book Value
b) Market Value
c) Cost value
d) None of the options

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

Answer: a

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: 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: Deceased partners share of profit is to be transferred to his account by:
a) P/L Adjustment A/c
b) P/L Suspense A/c
c) P/L Appropriation A/c
d) Revaluation Account

Answer: b

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: Reason for preparing Profit and Loss suspense Account is to
a) Adjust the profit of deceased partner
b) Adjust the Revaluation profit
c) Adjust the capital of deceased partner
d) Adjust the Revaluation loss

Answer: a

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