Table of Contents
Accountancy MCQs
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Dissolution of a Partnership Firm
Select the Best Alternate and tally your answer with the Answers given at the end of the book:
1. In which condition a partnership firm is deemed to be dissolved?
(A) On a partner’s admission
(B) On retirement of a partner
(C) On expiry of the period of partnership
(D) On loss in partnership
Answer
Answer: C
2. Court can make an order to dissolve the firm when :
(A) Some partner has become fully mad
(B) Partnership deed is fully followed
(C) Continued future profits are expected
(D) Firm is running legal business
Answer
Answer: A
3. On dissolution of a firm, realisation account is debited with
(A) All assets to be realised
(B) All outside liabilities of the firm
(C) Cash received on sale of assets
(D) Any asset taken over by one of the partners
Answer
Answer: A
4. On dissolution of a firm, out of the proceeds received from the sale of assets will be paid first of all
(A) Partner’s Capital
(B) Partner’s Loan to Firm
(C) Partner’s additional capital
(D) Outside Creditors
Answer
Answer: D
5. At the time of dissolution of firm, “Loan of partners” (Loans given by partners to the firm) is paid out of the amount realised on sale of assets :
(A) After making the payment of loans given by third party
(B) After making the payment of balance of Capital Accounts of partners
(C) After making the payment of above (A) and (B)
(D) Before the payment of loans given by third party
Answer
Answer: A
6. At the time of dissolution of firm, at which stage the balance of partner’s capital accounts is paid?
(A) After making the payment to third party’s loans
(B) Before making the payment of partners in respect of their loans
(C) After making the payment to third party for their loans as well as partners loans
(D) None of the above.
Answer
Answer: C
7. On firm’s dissolution, which one of the following account should be prepared at the last?
(A) Realisation Account
(B) Partner’s Capital Accounts
(C) Cash Account
(D) Partner’s Loan Account
Answer
Answer: C
8. In the event of dissolution of a partnership firm, the provision for doubtful debts is transferred to :
(A) Realisation Account
(B) Partners Capital Accounts
(C) Sundry Debtors Account
(D) None of the above
Answer
Answer: A
9. On dissolution, if a partner undertakes to make payment of a liability of the firm is debited)
(A) Profit & Loss Account
(B) Realisation Account
(C) Partner’s Capital Account
(D) Cash Account
Answer
Answer: B
10. Unrecorded liability, when paid on dissolution of a firm is debited to :
(A) Partner’s Capital A/’cs
(B) Realisation A/c
(C) Liabilities A/c
(D) Asset A/c
Answer
Answer: B
11. On dissolution of a partnership firm, profit or loss on realisation is distributed among the partners
(A) In capital ratio
(B) In Profit sharing ratio
(C) Equally
(D) None of the above
Answer
Answer: B
12. On dissolution of the firm, amount received from sale of unrecorded asset is credited to :
(A) Partner’s Capital Accounts
(B) Profit and Loss Account
(C) Realisation Account
(D) Cash Account
Answer
Answer: C
13. Realisation A/c is a :
(A) Nominal A/c
(B) Real A/c
(C) Personal A/c
(D) Real A/c as well as Personal A/c
Answer
Answer: A
14. In the event of dissolution of firm, the partner’s personal assets are first used for payment of the :
(A) Firm’s liabilities
(B) The personal liabilites
(C) None of the two
(D) Any of the two
Answer
Answer: B
15. A partnership firm is compulsorily dissolved :
(A) When the business of the firm is declared illegal
(B) When a partner of the firm dies
(C) When a partner of the firm becomes insolvent
(D) When a partner transfers his share to some other person without the consent of other partners
Answer
Answer: A
16. At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :
(A) Realisation Account
(B) Creditor’s Account
(C) Partner’s Capital Account
(D) Profit & Loss Account
Answer
Answer: C
17. On dissolution, goodwill account is transferred to):
(A) In the Capital Accounts of Partners
(B) On the credit of Cash Account
(C) On the Debit of Realisation Account
(D) On the Credit of Realisation Account
Answer
Answer: C
18. At the time of dissolution of partnership firm, fictitious assets are transferred to :
(A) Capital Accounts of Partners
(B) Realisation Account
(C) Cash Account
(D) Partners’ Loan Account
Answer
Answer: A
19. At time of dissolution of partnership firm, the balance of profit and loss account shown in the assets side of Balance sheet of the firm is transferred to:
(A) Realisation Account
(B) Cash Account
(C) Capital Accounts of partners
(D) Loan Accounts of partners
Answer
Answer: C
20. At the time of dissolution of partnership firm, the amount of ‘Bills Payable’ shown in the liability side of Balance Sheet is transferred to :
(A) Capital Accounts of Partners
(B) Realisation Account
(C) Cash Account
(D) Loan Account of Partners
Answer
Answer: B
21. On dissolution, the final balance of capital accounts are transferred to :
(A) Realisation Account
(B) Cash Account
(C) Profit & Loss Account
(D) Loan Accounts of Partners
Answer
Answer: B
22. Change in the existing agreement between the partners is called :
(A) Dissolution of Firm
(B) Dissolution of Partnership
(C) Dissolution of Business
(D) All of the Above
Answer
Answer: B
23. On dissolution, the balance of ‘Profit & Loss Account’ appearing on the assets side of a Balance Sheet is transferred to :
(A) On the debit of Realisation Account
(B) On the credit of Realisation Account
(C) On the debit of Partner’s Capital Accounts
(D) On the credit of Partner’s Capital Accounts
Answer
Answer: C
24. On dissolution of a firm, a partner paid ₹700 for firm’s realisation expenses. Which account will be debited?
(A) Cash Account
(B) Realisation Account
(C) Capital Account of the Partner
(D) Profit & Loss A/c
Answer
Answer: B
25. On taking responsibility of payment of realisation expenses by a partner, the account credited will be :
(A) Realisation Account
(B) Cash Account
(C) Capital Account of the Partne
(D) None of the Above
Answer
Answer: C
26. On dissolution of firm, loss calculate in realisation account is debited/credited to which account?
(A) Cash Account (Credit)
(B) Partners’ Capital Accoimts (Debit)
(C) Partners’ Capital Accounts (Credit)
(D) Realisation Account (Debit)
Answer
Answer: B
27. Profit or loss of realisation account is transferred to :
(A) Profit & Loss Account
(B) Capital Accounts of Partners
(C) Balance Sheet
(D) None of the Above
Answer
Answer: B
28. Which of the following is transferred to Realisation Account:
(A) Balance of Cash Account
(B) Balance of Profit & Loss Account
(C) Amount realised on sale of assets
(D) Reserves
Answer
Answer: C
29. Which of the following is not transferred to Realisation Account:
(A) Balance of Cash Account
(B) Balance of Reserves
(C) Balance of Profit & Loss Account
(D) All of the Above
Answer
Answer: D
30. On taking responsibility of payment of a liability of ₹50,000 by a partner, the account credited will be :
(A) Realisation Account
(B) Cash Account
(C) Capital Account of the Partner
(D) Liability Account
Answer
Answer: C
31. Cash balance shown in the Balance Sheet is shown on dissolution of firm in :
(A) Realisation Account
(B) Cash Account
(C) Capital Account
(D) None of the Account
Answer
Answer: B
32. On firm’s dissolution, on realisation of goodwill (which was shown in Balance Sheet) will be credited to :
(A) Cash A/c
(B) Realisation A/c
(C) Profit & Loss A/
(D) None of the A/c
Answer
Answer: B
33. On dissolution of a firm, its Balance Sheet revealed total creditors ₹50,000; Total Capital ₹48,000; Cash Balance ₹3,000. Its assets were realised at 12% less. Loss on realisation will be :
(A) ₹6,000
(B) ₹11,760
(C) ₹11,400
(D) ₹3,600
Answer
Answer: C
34. On firm’s dissolution, when a partner voluntarily gives his personal asset to firms’ creditor as payment, the account credited will be :
(A) Realisation A/c
(B) Partner’s Capital A/c
(C) Cash A/c
(D) None of the A/c
Answer
Answer: B
35. On dissolution, when a partner takes over an unrecorded asset, is credited :
(A) Capital Account of the Partner
(B) Cash Accoun
(C) Asset Account
(D) Realisation Account
Answer
Answer: D
36. On dissolution, when a partner takes over an asset is debited
(A) Realisation Account
(B) Partner’s Capital Account
(C) Cash Account
(D) Asset Account
Answer
Answer: B
37. In case of dissolution, assets are transferred to Realisation Account:
(A) At Book Value
(B) At Market Value
(C) Cost or Market Value, whichever is lower
(D) None of the Above
Answer
Answer: A
38. On dissolution, the balance of a partner’s capital account appearing on the assets side of a balance sheet is transferred to :
(A) On the Debit of Realisation Account
(B) On the Credit of Realisation Account
(C) On the Debit of Partner’s Capital Account
(D) On the Credit of Cash Account
Answer
Answer: C
39. On dissolution, partner’s loan is transferred to :
(A) Partner’s Capital Account
(B) Realisation Account
(C) Partner’s Loan Account
(D) Revaluation Account
Answer
Answer: C
40. Sundry Creditors amounted to ?8,000. These were paid at a discount of 5%. Realisation account will be debited by
(A) ₹8,000
(B) ₹7,600
(C) ₹400
(D) ₹8,400
Answer
Answer: B
41. There was an Unrecorded asset of ?2,000 which was taken over by a partner at ? 1,500. Partner’s Capital Account will be debited by
(A) ₹2,000
(B) ₹1,500
(C) ₹500
(D) ₹3,500
Answer
Answer: B
42. On dissolution of a firm, an unrecorded furniture of the value of ₹5,000 was taken up by a partner for ₹4,300. Which Account will be credited and by how much amount? :
(A) Cash Account by ₹4,300
(B) Realisation Account by ₹700
(C) Partner’s Capital Account by ₹5,000
(D) Realisation Account by ₹4,300
Answer
Answer: D
43. On the basis of following data, final payment to a partner on firm’s dissolution ‘ will be made : Debit balance of Capital Account ₹14,000; Share of his profit on realisation ₹43,000; Firm’s asset taken over by him for ₹17,000.
(A) ₹31,000
(B) ₹29,000
(C) ₹12,000
(D) ₹60,000
Answer
Answer: C
44. On payment of expenses of dissolution, account will be debited :
(A) Realisation Account
(B) Cash Account
(C) Profit & Loss Account
(D) None of the Above
Answer
Answer: A
45. An unrecorded asset was valued at ₹1,00,000. On firm’s dissolution, it was sold for 52%. Realisation account will be credited with :
(A) ₹52,000
(B) ₹48,000
(C) ₹1,00,000
(D) None of the Above
Answer
Answer: A
46. On firm’s dissolution, a partner undertook firm’s creditors at ? 17,000. In this case the account will be credited :
(A) Creditors A/c
(B) Cash A/c
(C) Realisation A/c
(D) Partner’s Capital A/c
Answer
Answer: D
47. On dissolution, losses are first of all met:
(A) Out of Capital
(B) Out of Profits
(C) Out of private assets of partners
(D) Out of loan from Bank
Answer
Answer: B
48. …………… is prepared at the time of dissolution :
(A) Revaluation Account
(B) Profit & Loss Account
(C) Profit and Loss Appropriation Account
(D) Realisation Account
Answer
Answer: D
49. While transferring assets to realisation account is omitted to be transferred :
(A) Patents
(B) Goodwill
(C) Cash
(D) Investments
Answer
Answer: C
50. If total assets are ₹2,00,000; total liabilities are ₹40,000; amount realised on sale of assets is ₹1,75,000 and realisation expenses are ₹3,000, the profit or loss on realisation will be :
(A) Profit ₹12,000
(B) Loss ₹68,000
(C) Loss ₹28,000
(D) Loss ₹25,000
Answer
Answer: C
51. On dissolution of a firm, debtors were ₹17,000. Of these ₹500 became bad and the rest realised 60%. Which account will be debited and by how much amount?
(A) Realisation Account by ₹16,500
(B) Profit & Loss Account by ₹500
(C) Cash Account by ₹9,900
(D) Debtors Account by ₹7,100
Answer
Answer: C
52. In the Balance Sheet Total Debtors appear at ₹50,000 and Provision for Doubtful Debts appear at ₹1,500. How much amount will be realised from Debtors, if bad debts amount to ₹10,000 and remaining debtors are realised at a discount of 5%
(A) ₹38,000
(B) ₹36,500
(C) ₹36,575
(D) ₹39,500
Answer
Answer: A
53. How much amount will be paid to Creditors for ₹25,000 if ₹5,000 of the creditors are not to be paid and the remaining creditors agreed to accept 5% less amount?
(A) ₹18,750
(B) ₹19,000
(C) ₹19,750
(D) ₹20,000
Answer
Answer: B
54. P, a partner, is to bear all expenses of realisation for which he is to be paid ₹2,000. P had to pay realisation expenses of ₹2,500. How much amount will be debited to Realisation Account?
(A) ₹500
(B) ₹2,500
(C) ₹4,500
(D) ₹2,000
Answer
Answer: D
55. How much amount will be paid to A, if his opening capital is ₹2,00,000 and his share of realisation profit amounts to ₹10,000 and he has taken over assets valuing ₹25,000 from the firm?
(A) ₹2,35,000
(B) ₹1,65,000
(C) ₹2,15,000
(D) ₹1,85,000
Answer
Answer: D
56. Investments valued ₹2,00,000 were not shown in the books. One of the creditors took over these investments in full satisfaction of his debt of ₹2,20,000. How much amount will be deducted from creditors?
(A) ₹20,000
(B) ₹2,20,000
(C) ₹4,20,000
(D) ₹2,00,000
Answer
Answer: B
57. If creditors are ?25,000, capital is ?1,50,000 and cash balance is ?10,000, what will be the amount of sundry assets?
(A) ₹1,75,000
(B) ₹1,85,000
(C) ₹1,65,000
(D) ₹1,40,000
Answer
Answer: C
58. If opening capitals of partners are A ₹3,00,000, B ₹2,00,000 and C ₹1,00,000 and their drawings during the year are A ₹50,000, B ₹40,000 and C ₹30,000 and creditors are ₹60,000, what will be the amount of assets of the firm?
(A) ₹5,40,000
(B) ₹4,20,000
(C) ₹4,80,000
(D) ₹6,60,000
Answer
Answer: A
59. If total assets of a firm are ₹12,00,000 and total liabilities are ₹2,40,000, what will be the capitals of P, Q and R if they share profits in the ratio of their capitals and profit sharing ratio is 1 : 2 : 3 :
(A) P ₹4,80,000; Q ₹3,20,000; R ₹1,60,000
(B) P ₹1,60,000; Q ₹3,20,000; R ₹4,80,000
(C) P ₹2,00,000; Q ₹4,00,000; R ₹6,00,000
(D) P ₹6,00,000; Q ₹4,00,000; R ₹2,00,000
Answer
Answer: B
60. On dissolution of a firm, a partner’s capital account has a credit balance of ₹42,000. His share of profit in realisation account is ?9,000. He has paid firm’s realisation expenses ₹3,000. He will finally get a payment of:
(A) ₹39,000
(B) ₹42,000
(C) ₹54,000
(D) ₹48,000
Answer
Answer: C
61. On dissolution of a firm, a partner took over ₹17,000 investments for ₹14,000. Which one of the following account will be debited/credited with how much amount?
(A) Partner’s Capital Account Debit with ₹14,000
(B) Partner’s Capital Account Credit with ₹17,000
(C) Realisation Account Credit with ₹17,000
(D) Realisation Account Credit with ₹3,000
Answer
Answer: A
62. On dissolution of firm, which item is debited to the realisation account?:
(A) Realisation expenses paid by partnert
(B) Balance of reserve fund
(C) Amount of unrecorded asset
(D) Creditor’s balance shown in the Balance Sheet
Answer
Answer: A
63. At the time of dissolution of a firm, Creditors are ₹70,000; Partners’ capital is ₹1,20,000; Cash Balance is ₹10,000. Other assets realised ₹1,50,000. Profit/Loss in the realisation account will be :
(A) ₹60,000 (Loss)
(B) ₹80,000 (Profit)
(C) ₹40,000 (Loss)
(D) ₹30,000 (Loss)
Answer
Answer: D
64. On dissolution of a firm, debtors ₹17,000 were shown in the Balance Sheet. Out of this ₹2,000 became bad. One debtor became insolvent. 70% were recovered from him out of ₹5,000. Full amount was recovered from the balance debtors. On account of this item, loss in realisation account will be :
(A) ₹5,100
(B) ₹1,500
(C) ₹3,500
(D) ₹2,000
Answer
Answer: C
65. X, Yand Z are partners in a firm in the ratio of 4 : 3 : 2. On firm’s dissolution, firm’s total assets are 7₹70,000, creditors are ₹15,000. Realisation expenses are ₹2,100. Assets realised 15% more than the book-value. Creditors were . paid 2% more. For profit/loss on realisation, Fs capital account will be debited/credited with :
(A) Credit ₹8,100
(B) Credit ₹2,700
(C) Debit ₹2,700
(D) Debit ₹2,400
Answer
Answer: B
66. On dissolution of a firm, firm’s Balance Sheet total is ₹77,000. On the assets side of the Balance Sheet items were shown preliminary expenses ₹2,000; Profit & Loss Account (Debit) Balance ₹4,000 and Cash Balance ₹1,800. Loss on realisation was ₹6,300. Total assets (including cash balance) realised will be :
(A) ₹69,200
(B) ₹71,000
(C) ₹64,700
(D) ₹62,900
Answer
Answer: C
67. On dissolution of a firm, partners’ capital accounts balance was ₹63,000; creditors balance was ₹12,000 and profit & loss account debit balance was ₹6,000. Profit on realisation of assets was ₹7,800. Total amount realised from assets was:
(A) ₹81,000
(B) ₹76,800
(C) ₹70,800
(D) ₹None
Answer
Answer: B
68. On dissolution of a firm, a partner took-over the investments of ₹15,000 at ₹19,000. By how much amount the Realisation Account will be credited?
(A) ₹4,000
(B) ₹19,000
(C) Nil
(D) ₹23,000
Answer
Answer: B
69. Anu, Bina and Charan are partners. The firm had given a loan of ₹20,000 to Bina. On the event of dissolution, the loan will be settled by : (C.B.S.E. Sample Paper, 2015)
(A) Transferring it to debit side of Realization Account.
(B) Transferring it to credit side of Realization Account.
(C) Transferring it to debit side of Bina’s Capital Account.
(D) Bina paying Anu and Charan privately.
Answer
Answer: C
