On 1/4/22, X and Y decided to dissolve their firm. On that date of dissolution, Goodwill appeared at Rs. 5,00,000 in the Balance Sheet. Goodwill will - Accountancy MCQ CUET Accountancy 2022 20 Aug Shift 2 2026 | ExamTest.live

easyMCQCUET Accountancy 2022 20 Aug Shift 22026Accountancy

1 mark

On 1/4/22, X and Y decided to dissolve their firm. On that date of dissolution, Goodwill appeared at Rs. 5, 00, 000 in the Balance Sheet. Goodwill will be:

A $Transferred to the debit side of realisation A/c$
B $Transferred to the credit side of partner's Capital A/c in their profit sharing ratio$
C $Transferred to the credit side of realisation A/c$
D $Transferred to cash account$

Solution & Step-by-step Explanation

At the time of dissolution, all existing assets (including Goodwill appearing in the Balance Sheet) are transferred to the debit side of the Realisation Account to close their respective ledger accounts.

Try it yourself before checking the explanation above.

On 1/4/22, X and Y decided to dissolve their firm. On that date of dissolution, Goodwill appeared at Rs. 5, 00, 000 in the Balance Sheet. Goodwill will be:

Transferred to the debit side of realisation A/c

Transferred to the credit side of partner's Capital A/c in their profit sharing ratio

Transferred to the credit side of realisation A/c

Transferred to cash account

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