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easyMCQCUET Accountancy 2023 28 May Shift 12026Accountancy
3 attempts0% success rate1 mark

Upon the dissolution of a partnership firm, the existing Goodwill Account appearing in the ledger books is transferred directly to:

  1. A
    The debit side of the Realisation Account
  2. B
    The credit side of the Realisation Account
  3. C
    The credit side of the Partners' Capital/Current Accounts
  4. D
    The debit side of the Partners' Capital/Current Accounts

Solution & Step-by-step Explanation

During dissolution, all existing asset accounts appearing in the Balance Sheet (except cash/bank balances and fictitious assets) are closed by transferring their balances to the debit side of the Realisation Account. Since goodwill is an intangible asset, it is treated like any other asset and debited to the Realisation Account.

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Upon the dissolution of a partnership firm, the existing Goodwill Account appearing in the ledger books is transferred directly to:
A
The debit side of the Realisation Account
B
The credit side of the Realisation Account
C
The credit side of the Partners' Capital/Current Accounts
D
The debit side of the Partners' Capital/Current Accounts

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PartnershipDissolutionRealisation Closures

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