At the time of dissolution of their firm, Ahmed and Subhash, who are partners of that firm, agreed that Ahmed will pay realization expenses for a fixe - CUET Accountancy MCQ CUET Accountancy 16 July Shift 2 2026 | ExamTest.live

mediumMCQCUET Accountancy 16 July Shift 22026CUET Accountancy

1 mark

At the time of dissolution of their firm, Ahmed and Subhash, who are partners of that firm, agreed that Ahmed will pay realization expenses for a fixed remuneration of ₹12,000. The actual expenses were ₹16,000. The Journal entry to be passed is:

Solution & Step-by-step Explanation

When a partner agrees to bear the realization expenses for a fixed remuneration, the firm is only responsible for the fixed remuneration amount. Any actual expenses above or below this amount are personal matters of the partner.Therefore, the firm will debit Realization A/c with the fixed remuneration and credit the partner's capital account: Realization A/c Dr. 12, 000 q u a d To Ahmed’s Capital A/c 12, 000

Try it yourself before checking the explanation above.

At the time of dissolution of their firm, Ahmed and Subhash, who are partners of that firm, agreed that Ahmed will pay realization expenses for a fixed remuneration of ₹12,000. The actual expenses were ₹16,000. The Journal entry to be passed is:

Ahmed's Capital A/c Dr. 16,000 To Realization A/c 16,000

Realization A/c Dr. 12,000 To Bank A/c 12,000

Realization A/c Dr. 12,000 To Ahmed's Capital A/c 12,000

Realization A/c Dr. 16,000 To Ahmed's Capital A/c 16,000

Practice with timed mock tests and track your performance across CUET Accountancy.