Dissolution Questions

Based on the passage given for Meena and Tina, answer the question:State the correct Journal entry for the payment of realization expenses of $\text{Rs. }2,000$.

Based on the passage given for Meena and Tina, answer the question:State the correct Journal entry when investments are taken over by partner Tina at their book value of $\text{Rs. }50,000$.

Select the entry that is to be made when a creditor accepts an asset in full and final settlement of his account.

Realisation A/c is debited with __________ on the dissolution of firm.

Select the way by which provisions appearing in the Balance Sheet of a partnership firm are closed at the time of firm's dissolution.

Mukund's Loan of Rs. $50,000$ to the firm, was settled at Rs. $55,000$ at the time of firm's dissolution, where Mukund was one of the partner. What entry will be passed?

Which of the following will not be shown in Realisation Account?

The dissolution of a Partnership may take place due to:A. Retirement of a PartnerB. Death of a PartnerC. Insolvency of a PartnerD. Admission of a New PartnerE. Completion of the Venture, if the partnership was formed for that specific purposeChoose the correct answer from the options given below:

Select the option from the following that is not considered a mode of reconstitution of a partnership firm.

Identify the scenario from the options below that leads to the complete dissolution of a partnership firm, rather than just a reconstitution of the partnership.

Arrange the following financial steps in the correct chronological sequence when winding up and dissolving a partnership firm.A. Payment of loans advanced by PartnersB. Settlement of secured outsider liabilitiesC. Realization of assets into cashD. Final settlement of partner capital accountsE. Payment of unsecured outsider liabilitiesChoose the correct answer from the options given below:

Based on the passage given for Meena and Tina, answer the question:Identify the exact final total amount realized in cash from Sundry Debtors.

The assets of the firm, including any sum contributed by the partners to make up deficiencies of capital, shall be applied first for paying:

Which statements are true about the dissolution of a partnership-(A) Dissolution of a partnership is different from dissolution of a firm.(B) A partnership is dissolved when there is a death of a partner.(C) A firm is compulsorily dissolved when a partner decides to retire.(D) Dissolution of partnership cannot take place without intervention of the court.Choose the correct answer from the options given below:

On the dissolution of a firm, external creditors' accounts are transferred to:

Which of the following indicates a situation of compulsory dissolution of a partnership firm?

When realization expenses are paid by the firm on behalf of a partner, such expenses are debited to:

According to Section ___________ of the Indian Partnership Act 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.

Arrange the following in correct order in which assets of the firm can be used in their settlement upon dissolution.(A) Residue shall be divided between the partners in their profit sharing ratio.(B) In paying the partners proportionately what is due to him/her on account of capital.(C) In paying the partners proportionately what is due to him/her from the firm for advances/loans.(D) In paying the debts of the firm to the third parties.Choose the correct answer from the options given below:

In which of the following cases does the economic relationship between the partners come to an end?

When unrecorded liabilities are settled and paid at the time of dissolution of a partnership firm, they are recorded on the:

At the time of a firm's dissolution, a machine costing $\text{Rs. }20,000$ along with cash of $\text{Rs. }5,000$ were given to creditors of $\text{Rs. }30,000$ in full settlement of their claim. In this case, the Realisation Account will be debited with what amount for this settlement transaction?

X, Y, Z are partners who decided to dissolve their firm. Realisation expenses were to be borne by Y for which he was to be given remuneration of Rs. $10,000$. Actual expenses were Rs. $12,000$. How much amount will be transferred to Y's Capital A/c for it?

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 $10\%$ less than book value.B. All the debtors proved good except a person C who did not pay Rs. $10,000$.The treatment of Goodwill appearing in the balance sheet will be:

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 $10\%$ less than book value.B. All the debtors proved good except a person C who did not pay Rs. $10,000$.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:

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 $10\%$ less than book value.B. All the debtors proved good except a person C who did not pay Rs. $10,000$.The amount recovered from the debtors is:

Aman and Mohan, partners of a firm decided to dissolve the business on 31-03-22. The firm decided to pay realisation expenses of Rs. $1,000$ on behalf of Mohan. Rs. $1,000$ will be debited to

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 $10\%$ less than book value.B. All the debtors proved good except a person C who did not pay Rs. $10,000$.Due to the ill health of B, they decided to dissolve the firm. It comes under ____ form of dissolution.

On 1st April 2022, A, B and C decided to dissolve their firm. On the date of dissolution, Sundry debtors appeared in Balance Sheet at Rs. $6,00,000$ and Provision for doubtful debt at Rs. $30,000$. Debtors to extent of Rs. $60,000$ were bad. In journal entry for realisation of debtors:

On dissolution of a firm, bank overdraft is transferred to :

Raman and Naman were in partnership sharing profit and losses as $3:2$. Their partnership firm was dissolved on 31 March 2022. On the date of dissolution, Naman's loan was Rs. $20,000$. Naman agreed to take stock (already transferred to Realisation A/c) of Rs. $15,000$ at Rs. $18,000$ and balance in cash for the settlement of loan. Journal Entry for above transaction is:

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:

Which among the following are the modes of dissolution?A. Dissolution by NatureB. Compulsory DissolutionC. Dissolution by AgreementD. Dissolution by NoticeChoose the correct answer from the options given below:

When the business of a partnership firm becomes illegal due to changes in regulations or laws, it leads to dissolution under which category?

A firm may not be dissolved by court in the following condition:

In the balance sheet Total Debtors appear at Rs. 1,50,000 and provision for doubtful debts appear at Rs. 1,500. How much amount will be realised from debtors, if bad debts amounted to Rs. 20,000 and remaining debtors realised at a discount of 15%?

On the dissolution of the partnership firm the amount realised from sale of assets shall be applied in following order:(a) Distributing the amount left among the partners in their profit sharing ratio(b) Paying amount due to partner on account of loan advanced by him(c) Paying amount due to the creditors(d) Paying partners' capital account balancesChoose the correct answer from the options given below:

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:

Which amongst the following is not a ground for dissolution of a partnership firm on the happening of certain contingencies?

Arrange following in a sequence in which amount realised from Assets will be utilised to pay as per Section 48 of the Indian Partnership Act, 1932.A. Partner's LoanB. Partner's CapitalC. Secured debts of the firmD. Unsecured debts of the firmE. Residue to partnersChoose the correct answer from the options given below:

Out of the following, when will the need for valuation of goodwill does not arise?

Match List I with List II regarding accounting treatments:List IA. Transfer of accumulated profitsB. Unrecorded asset sold on dissolution of firmC. Manager's commissionD. Partner's commissionList III. Realisation AccountII. Profit and Loss AccountIII. Profit and Loss Appropriation AccountIV. Partner's Capital AccountChoose the correct answer from the options given below:

Based on the following passage, answer questions from 46 to 50:Meena and Tina are partners in a firm sharing profits in the ratio $3:2$. They decided to dissolve their firm on March 31, 2017 when their Balance Sheet was as follows:Balance Sheet of Meena and Tina as on March 31, 2017LiabilitiesAmount (Rs.)AssetsAmount (Rs.)Capital Accounts:Machinery$70,000$ Meena: $90,000$ Investments$50,000$ Tina: $80,000$$1,70,000$ Stock$22,000$ Sundry Creditors$60,000$ Sundry Debtors$1,03,000$ Bills Payable$20,000$ Cash at bank$5,000$ Total$2,50,000$ Total$2,50,000$ The assets and liabilities were disposed of as follows:a. Machinery was given to creditors in full settlement of their account and stock was given to bills payable in full settlement.b. Investments were taken over by Tina at book value. Sundry debtors of book value $\text{Rs. }50,000$ were taken over by Meena at $10\%$ less and remaining debtors realized $\text{Rs. }51,000$.c. Realisation expenses amounted to $\text{Rs. }2,000$.Question: When a creditor accepts an asset whose value is more than the amount due to him in full settlement, he will _______ the excess amount which will be credited to _______ Account.

Based on the passage given for Meena and Tina, answer the question:Which mode of dissolution is highlighted in the above case where partners decide mutually among themselves to wind up operations?

In the case of the Dissolution of a partnership firm, which accounts are opened:(A) Realization Account
(B) Revaluation Account
(C) Partners Capital Account
(D) Bank AccountChoose the correct answer from the options given below:

Comprehension:Read the following financial details carefully and answer the questions that follow.Following is the Balance Sheet of Ashwani and Bharat on March 31, 2024.Balance Sheet of Ashwani and Bharat as on March 31, 2024LiabilitiesAmount (₹)AssetsAmount (₹)Creditors$76,000$ Cash at bank$17,000$ Mrs. Ashwani's loan$10,000$ Stock$10,000$ Mrs. Bharat's loan$20,000$ Investments$20,000$ Investment Fluctuation Reserve$2,000$ Debtors $40,000$ Less: Provision for Doubtful Debts $4,000$$36,000$ General Reserve$20,000$ Buildings$70,000$ Capitals:Ashwani: $20,000$ Bharat: $20,000$$40,000$ Goodwill$15,000$ Total$1,68,000$ Total$1,68,000$ The firm was dissolved on that date under the following terms:Ashwani promised to pay Mrs. Ashwani’s loan and took away the stock for ₹ $8,000$.Bharat took away half of the investments at $10\%$ less than book value.Debtors realized ₹ $38,000$. Creditors were paid off at a discount of ₹ $380$.Buildings realized ₹ $1,30,000$. Goodwill realized ₹ $12,000$, and the remaining investments were sold for ₹ $9,000$.An old unrecorded typewriter was taken over by Bharat for ₹ $600$.Realization expenses amounted to ₹ $2,000$.If the net realization profit is ₹ $55,980$, how will it be distributed between the partners?

Comprehension:Read the financial details from the preceding text carefully.What is the total amount realized from the sale/disposal of assets that will be debited to the Bank Account?

Comprehension:Read the financial details from the preceding text carefully.What is the total amount by which the Bank Account will be credited by the Realisation Account (representing cash outflows for liabilities and expenses)?

Comprehension:Read the financial details from the preceding text carefully.For taking over half of the investments, Bharat's Capital Account will be:

Comprehension:Read the financial details from the preceding text carefully.At the time of dissolution, how will the Investment Fluctuation Reserve balance appearing in the liabilities side of the Balance Sheet be treated?

When realisation expenses are paid by the firm on behalf of a partner, which among the following will be debited:

The assets of the firm, including any sum contributed by the partners to make up deficiencies of capital, shall be utilized in which sequence? Arrange the following in proper sequence:(A) In paying the debts of the firm to the third parties
(B) In paying each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e. partner's loan)
(C) In paying to each partner proportionately what is due to him on account of capital
(D) The residue, if any, shall be divided among the partners in their profit sharing ratioChoose the correct answer from the options given below:

Partner's current accounts are transferred to the respective partners' ________ at the time of dissolution of a partnership.

One of the partners took-over furniture at the time of dissolution of the firm, which account will be debited?

In case of the dissolution of a firm, the firm ceases to conduct business and has to settle its accounts. Losses, including deficiencies of capital, shall be paid in the following manner and order:(A) Out of capital of partners.
(B) By the partners individually in their profit sharing ratio.
(C) Profits.Choose the correct answer from the options given below:

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

While settling accounts during the dissolution of a partnership firm, what is the correct statutory order of application of the firm's assets according to Section 48 of the Indian Partnership Act, 1932?(A) In paying the debts of the firm to third parties(B) In paying to each partner proportionately what is due to him on account of capital(C) Divided among the partners in their profit sharing ratio if any surplus remains(D) In paying each partner proportionately what is due to him/her from the firm for advances/loans as distinguished from capitalChoose the correct answer from the options given below:

Dissolution of a firm takes place on the happening of certain contingencies in the following cases:(A) By the death of a partner
(B) By the adjudication of a partner as an insolvent
(C) When the business of the firm becomes illegal
(D) If constituted for a fixed term, by the expiry of that termChoose the correct answer from the options given below:

When a firm is dissolved with the consent of all the partners, it is called:

On the dissolution of a firm, creditors are transferred to:

According to Section __________ of the Indian Partnership Act 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.

When a partnership firm is dissolved, final payment made to partners is transferred to:

Case study: A 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 $10\%$ less than book value.B. All the debtors proved good except a person C who did not pay Rs. $10,000$.The accumulated profits and reserve are transferred to:

Match List-I with List-II:List-I (Transaction)List-II (Relevant account)(A) Settlement of Partners Loan(I) Credit side of Realization A/c(B) Transfer of liabilities(II) Partner's Capital will be credited(C) Transfer of Assets(III) Credit Side of Bank A/c(D) Remuneration payable to partner(IV) Debit Side of Realization A/cChoose the correct answer from the options given below:

Section 49 of the Indian Partnership Act, 1932 deals with:

Which of the following are the ways for the dissolution of a firm?(A) Dissolution by Notice(B) Dissolution by agreement(C) Dissolution by court(D) Dissolution by not terminating businessChoose the correct answer from the options given below:

The assets of the firm, including any sum contributed by the partners to make up deficiencies of capital, shall be applied first for paying _____________.

Match List-I with List-IIList-IList-II(A) Payment of loans due to partners(I) Realisation A/c Dr To Bank A/c(B) For settlement of partners' accounts, in case their capital account shows a debit balance(II) Bank A/c Dr. To loan to partners(C) For settlement of loan by a firm to a partner(III) Bank A/c Dr. To Partner's Capital A/c(D) For settlement of any unrecorded liability(IV) Partner's Loan A/c Dr. To Bank A/cChoose the correct answer from the options given below:

Which of the following combination of statements are true about dissolution-(A) A firm is compulsorily dissolved when a partner decide to retire.(B) Dissolution of a partnership is different from dissolution of a firm.(C) A partnership is dissolved when there is a death of a partner.(D) Dissolution of a firm necessarily involves dissolution of partnership.Choose the correct answer from the options given below:

In case of dissolution of a firm, Losses including deficiencies of capital, shall be paid first out of ....

Dissolution of a firm cannot take place in which of the situation:

According to section _________ of the Indian Partnership Act, 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.

On the ultimate dissolution of a partnership firm, partners' capital accounts are closed finally through which account?

The Court may order a partnership firm to be dissolved under Section 44 of the Act in which of the following scenarios?

Which combination of the given statements is correct regarding the dissolution of a partnership and a firm?(A) Dissolution of a partnership is fundamentally different from the dissolution of a firm.(B) A partnership is dissolved when a partner dies.(C) A firm is dissolved when all partners give their consent to dissolve it.(D) A firm is compulsorily dissolved when any single partner decides to retire.Choose the correct answer from the options given below:

When realization expenses are paid by the firm on behalf of a partner (who was explicitly given the responsibility to bear them), which account must be debited in the firm's books?

According to which section of the partnership Act 1932, the dissolution of a partnership between all the partners of a firm is called the dissolution of the firm?

Stock at the time of dissolution was appearing in books at Rs 50,000. Half of the stock was sold at a discount of 20% and the remaining was taken over by one of the partners at a 10% discount. What amount was received in cash at the time of realization of stock.

In case of dissolution, a Machine costing $\text{Rs. }20,000$, along with cash of $\text{Rs. }5,000$ were given to creditors of $\text{Rs. }30,000$ in full settlement of their claim.In this case, Realisation A/c will be Debited with:

Match List-I with List-IIList-IList-II(A) Compulsory Dissolution(I) Partner becomes insane(B) Dissolution by notice(II) Death of a partner(C) Dissolution by Court(III) Business become illegal(D) Dissolution on certain contingencies(IV) Partnership at willChoose the correct answer from the options given below:

Arrange the following in the sequence in which they shall be applied in payment at the time of dissolution of a firm:(A) The debts of the firm to the third parties.(B) Partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e. partner's loan).(C) Each partner proportionately what is due to him on account of capital.(D) Divided among the partners in their profit sharing ratio.Choose the correct answer from the options given below:

In which of the following cases can a court order the dissolution of a partnership firm?

Which of the following will lead to the dissolution of a partnership firm?

In case of dissolution of a partnership firm, losses, including deficiencies of capital, shall be paid first out of:

Neil, Kapil, and Sunil started a furniture business in partnership. After one year of operations, they began exporting contraband items hidden inside blank spaces within the furniture. As authorities found out about the illegal business operations of the firm, the legal system will compel them for:

Which of the following events takes place in the case of the dissolution of a partnership firm?

Match List-I with List-II:List-IList-II(A) Meaning of Dissolution(I) Section 49 of the Partnership Act, 1932(B) Application of Assets(II) Section 39 of the Partnership Act, 1932(C) Private Debts Vs Firm's Debts(III) Section 4 of the Partnership Act, 1932(D) Nature of Partnership(IV) Section 48 of the Partnership Act, 1932Choose the correct answer from the options given below:

Valuation of goodwill is NOT required in which of the following scenarios?

Match List-I with List-II:List-IList-II(A) Increase in assets at the time of retirement(I) Debit side of Realisation Account(B) Asset taken over by a partner at the time of dissolution(II) Credit side of Revaluation Account(C) Unrecorded Liability settled at the time of admission(III) Credit side of Realisation Account(D) Remuneration paid for realization of assets(IV) Debit side of Revaluation AccountChoose the correct answer from the options given below: