HomeTestsSearchRankProfile
easyMCQCUET Accountancy2026Accountancy
1 mark

In the case of a dissolution of a firm, accumulated losses are transferred to:

  1. A
    Realisation Account in Equal Ratio
  2. B
    Realisation Account in Profit Sharing Ratio
  3. C
    Capital Accounts in Equal Ratio
  4. D
    Capital Accounts in Profit Sharing Ratio

Solution & Step-by-step Explanation

Accumulated losses (unabsorbed balance sheet values like debit P&L or deferred revenue) are not routine business assets to be closed to the Realisation Account. They must be directly cleared into the Partners' Capital Accounts, debiting them in their old Profit Sharing Ratio.

Practice this question

Try it yourself before checking the explanation above.

In the case of a dissolution of a firm, accumulated losses are transferred to:
A
Realisation Account in Equal Ratio
B
Realisation Account in Profit Sharing Ratio
C
Capital Accounts in Equal Ratio
D
Capital Accounts in Profit Sharing Ratio

Share This Question

Related Questions

Ready for a Full Test?

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

Discussion