Question by CA (Dr.) G.S.GREWAL, Series – 30

True / False

  1. When the business of the firm is unlawful then it is compulsory dissolved.

Fill in the Blank

  1. Liability of a partner is unlimited _____________ and _______________.

Multiple Choice Question

  1. Nature of Realisation Account is:-
  2. a) Nominal Account
  3. b) Real Account
  4. c) Personal Account
  5. d) Asset Account

Answer – Question by CA (Dr.) G.S.GREWAL, Series – 30

True/False

  1. True

Reason: No one is allowed to disobey the law of the country hence if any firm is engaged in unlawful business then it must be compulsory dissolved.

Fill in the Blank

  1. Joint, Several

Multiple Choice Question

  1. (a)

Reason: The nature of Realisation Account is Nominal as it records expenses and gains.

Question by CA (Dr.) G.S.GREWAL, Series – 31

True / False

  1. Debtors of ₹ 50,000 are realized at a loss of 2% the amount thus realised is                  ₹ 49,000.

Fill in the Blank

  1. Partner’s Loan Account is not transferred to Realisation on _______________.

Multiple Choice Question

  1. Partners Loan Account is:-
  2. a) Personal Account
  3. b) Real Account
  4. c) Nominal Account
  5. d) Expense Account

Answer – Question by CA (Dr.) G.S.GREWAL, Series – 31

True/False

  1. True

Reason:- Debtors = ₹ 50,000 less (2% of ₹ 50,000)

Amount Realised = ₹ 49,000

Fill in the Blank

  1. dissolution

Multiple Choice Question

  1. (a)

Reason: Partner’s Loan Account is Personal Account since it is related to a person.

Question by CA. (Dr.) G. S. GREWAL – Series 46

True / False

  1. Dissolution of Partnership is different from Dissolution of partnership Firm.

Fill in the Blank

  1. On liability being paid by a partner on dissolution of the firm, , his ___________ will be credited and ______________will be debited.

Multiple Choice Question

  1. On Dissolution Goodwill Account is transferred to:-

(a)     Credit side of Bank Account.

(b)     Debit side of Partners’ Capital Account

(c)     Debit side of Realisation Account

(d)     Credit side of Realisation Account

Answer – Question by CA. (Dr.) G. S. GREWAL – Series 46

  1. True

Reason:- Dissolution of Partnership means old partnership deed has come to an end and new partnership deed has come into effect.

On the other hand, Dissolution of Partnership Firm means the business of the firm has come to an end. As a result, Partnership Agreement has also come to an end.

  1. Capital Account, Realisation Account
  2. (c)

Reason: On Dissolution Goodwill Account is transferred to Debit side of Realisation Account since all asset on dissolution are transferred to Realisation Account.

Question by CA. (Dr.) G. S. GREWAL – Series 50

True/False

  1. The court can order the Dissolution of a Partnership Firm, if any of the partners becomes a person of unsound mind.

Fill in the Blank

  1. Accumulated Profits/losses are distributed amongst the partners in their ________________ ratio at the time of Dissolution of Partnership Firm.

Multiple Choice Question

  1. Section 48 of the Indian Partnership Act, 1932 deals with :-

(a)     Payment of firms debts and private debts

(b)     Settlement of account when the firm is dissolved

(c)     Dissolution of the firm

(d)     Admission of a partner

Answer – Question by CA. (Dr.) G. S. GREWAL – Series 50

  1. True

Reason: The Partnership Act, 1932 prescribes for dissolution of the firm, if a partner becomes a person of unsound mind.

  1. Profit sharing
  2. (b)

Reason: Section 48 of the Indian Partnership Act, 1932 deals with the manner in which assets of the firm shall be used on it being dissolved. It provides that assets be used in following order

  1. Payment of outside liabilities.
  2. Payment of Partner’s loan.
  3. Repayment of capitals.

Question by CA. (Dr.) G. S. GREWAL – Series 53

True/False

  1. 1. If creditors are ₹ 20,000, loan (credit) is ₹ 10,000, capital is of ₹ 1,50,000 and cash balance is ₹ 30,000, remaining assets will be ₹ 1,80,000.

Fill in the Blank

  1. When amount is realised from sale of unrecorded asset, it is __________ to Cash/Bank Account and _____________ to Realisation Account.

Multiple Choice Question

  1. If a partner pays liability of a firm on dissolution Journal entry passed will be:

(a)     Realisation A/c   Dr., To Bank/Cash A/c

(b)     Realisation A/c   Dr., To Partners Capital A/c

(c)     Bank/Cash Dr., To Partners Capital A/c

(d)     Partners’ Capital A/c Dr., To Bank A/c

Answer – Question by CA. (Dr.) G. S. GREWAL – Series 53

  1. False

Reason: Assets are always equal to liabilities + Capital. Hence,

 ₹ 20,000 (creditors) + ₹ 10,000 (loan) + ₹ 1,50,000 (capital) =

₹ 30,000 (cash) + Balance Assets

= ₹ 1,80,000 = ₹ 30,000 + Balance Assets

Balance Assets = ₹ 1,80,000 – ₹ 30,000

= ₹ 1,50,000.

Correct Statement: If creditors are ₹ 20,000, Loan (credit) is ₹ 10,00 capital is 1,50,000 and cash balance is ₹ 30,000, remaining assets will be ₹ 1,50,000.

  1. debited, credited
  2. (b)

Reason: If a partner to pays the liability of a firm on dissolution it will be recorded as:

    Realisation A/c                   …Dr.

           To Partners Capital A/c

Partners’ Capital A/c will be credited if partner pays the liability of the firm.

 

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