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easyMCQCUET Accountancy 2025 27 May Shift 22026Accountancy
1 mark

At the time of dissolution of a firm, the Loan from a Partner Account should be:

  1. A
    Paid out separately
  2. B
    Transferred into Realization Account
  3. C
    Transferred into Partners' Capital Account
  4. D
    Transferred into Partners' Current Account

Solution & Step-by-step Explanation

According to Section 48 of the Indian Partnership Act, 1932, a partner's loan is an internal non-capital liability. It is not transferred to the Realisation Account (which is for external liabilities). Instead, it is settled separately by opening a separate Partner's Loan Account and paying it off after clearing external liabilities but before making any payments towards partners' capital balances.

Practice this question

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At the time of dissolution of a firm, the Loan from a Partner Account should be:
A
Paid out separately
B
Transferred into Realization Account
C
Transferred into Partners' Capital Account
D
Transferred into Partners' Current Account

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