Case studyA and B were partners in a partnership firm. Due to the ill health of B they decided to dissolve the firm. The position of Assets and Liabilities on the date of dissolution was:
It was agreed that following transactions will take place :A. A wanted to start the business in sole proprietorship So he took Building and Furniture at less than book value.B. All the debtors proved good except a person C who did not pay Rs. .Following items appear on the Debit side of Realisation A/C except :A. Transfer of AssetsB. Payment of liabilitiesC. ProvisionsD. Realisation expensesE. Asset taken over by partnerChoose the correct answer from the options given below:
- AA, C, E only
- BC, D, E only
- CD, E only
- DC, E only
Solution & Step-by-step Explanation
The debit side of Realisation A/C includes: Transfer of Assets (A), Payment of Liabilities (B), Realisation expenses (D).Items that do NOT appear on the debit side (hence appear on the credit side) are: Provisions against assets (C) and Asset taken over by a partner (E).Thus, C, E only.