NEW
Font size
WorksheetsDissolution of Partnership - Multiple Choice Questions
Total questions: 36
Worksheet time: 18mins
Which is not correct in the case of Dissolution of Partnership
The original partnership agreement is terminated
Some partners continue in the business
No partner to continue in the business
A new partnership comes in to existence
Dissolution of partnership does not lead to
Termination of the original partnership agreement
Dissolution of the existing partnership
Coming in to existence of a new partnership
Dissolution of the firm
Realisation Account is a
Nominal Account
Real Account
Personal Account
None of these
The Account prepared at the time of dissolution of a partnership firm
Revaluation Account
P&L Adjustment A/c
P&L Appropriation A/c
Realisation Account
The Realization account is closed by transferring the profit or loss to
Partner’s Capital Accounts
Partner’s Loan Account
Bank Account
Balance Sheet
The Loan from Mrs. of a partner is credited to
Her Capital Account
Husband’s Capital Account
Husband’s Loan Account
Realisation Account
On dissolution of partnership Firm, amount realised from unrecorded asset is credited to.
Realisation A/c
Re-Valuation A/c
Capital A/c
Goodwill A/c
Entry for closing Provision for Bad debts at the time of dissolution of firm is______.
Provision for baddebt a/c Dr. To Realisation
Realisation a/c Dr. To Provision for baddebt
Provision for baddebt a/c Dr. To Cash
Profit & Loss a/c Dr. To Provision for baddebt
A firm is compulsorily dissolved when all partners or when all except one partner become insolvent
True
False
Unrecorded liabilities when paid by a partner are shown in______.
Partner’s Capital Account
Profit and Loss Account
Cash Account
Revaluation Account
On dissolution of a firm, bank overdraft is transferred.
cash a/c
bank a/c
Realisation a/c
capital a/c
On dissolution of the firm, partners capital accounts are closed through______account.
Cash/Bank Account
Profit and Loss Account
Revaluation Account
Partners Loan Account
Dissolution of partnership means:
The termination of the partnership business and relationship among partners.
The admission of a new partner into the firm.
The change in profit-sharing ratio among partners.
The retirement of a partner from the firm.
Dissolution of firm means:
The termination of the partnership and winding up of the firm's business.
The admission of a new partner into the firm.
The expansion of the firm's business activities.
The change in the location of the firm's office.
Why the balance at bank is not transferred to the Realisation A/c on the dissolution of a Partnership?
Because the bank balance is used to pay off liabilities and settle accounts, not realized as an asset.
Because the bank balance is considered a fixed asset.
Because the bank balance is transferred to partners’ capital accounts directly.
Because the bank balance is treated as a profit on dissolution.
How will you settle firm’s debts and private debts of partner’s on the dissolution of a firm?
Firm’s debts are settled first, then private debts of partners from their share.
Private debts of partners are settled first, then firm’s debts.
Both debts are settled simultaneously without priority.
Firm’s debts are ignored and only private debts are settled.
Realisation Account is:
An account prepared to ascertain profit or loss on dissolution of a partnership firm.
An account used to record daily transactions of a business.
An account showing the capital invested by partners.
An account used for recording depreciation.
The Accounting treatment of settlement with the creditors through transfer of an asset is:
Creditor’s account is debited and asset account is credited.
Asset account is debited and creditor’s account is credited.
Both creditor’s and asset accounts are debited.
No entry is required in the books.
How is goodwill treated on dissolution of the firm?
Goodwill is valued and distributed among the partners as per their profit-sharing ratio.
Goodwill is ignored and not considered during dissolution.
Goodwill is transferred to the capital account of the senior partner only.
Goodwill is written off against the firm's assets.
Which are the cases where a partnership is dissolved?
A partnership is dissolved by mutual agreement, insolvency of a partner, expiry of term, or completion of venture.
A partnership is dissolved only when all partners retire.
A partnership is dissolved only if the business makes a loss.
A partnership is dissolved only by court order.
Toya and Soya are partners sharing profits and losses equally. They decided to dissolve the firm on 15th March, 2005 which resulted in a loss of Rs. 30,000. The capital accounts of Toya and Soya was Rs. 20,000 and Rs. 30,000 respectively. The cash account showed a balance of Rs. 20,000. Which of the following is the correct journal entry for transferring the loss to the capital accounts of the partners?
Loss on dissolution A/c Dr. 30,000
To Toya's Capital A/c 15,000
To Soya's Capital A/c 15,000
Loss on dissolution A/c Dr. 30,000
To Toya's Capital A/c 20,000
To Soya's Capital A/c 10,000
Loss on dissolution A/c Dr. 30,000
To Toya's Capital A/c 10,000
To Soya's Capital A/c 20,000
Loss on dissolution A/c Dr. 30,000
To Toya's Capital A/c 30,000
Distinguish between dissolution of partnership and dissolution of firm.
Dissolution of partnership refers to a change in the relationship among partners, while dissolution of firm means the closure of the business as a whole.
Dissolution of partnership and dissolution of firm both mean the closure of the business.
Dissolution of partnership is the same as dissolution of firm.
Dissolution of firm refers to a change in the relationship among partners, while dissolution of partnership means the closure of the business as a whole.
Accounts are settled on dissolution by:
Paying creditors first, then distributing remaining assets among partners
Distributing assets equally among partners without paying creditors
Paying partners first, then creditors
Transferring all assets to a single partner
Which of the following are modes of dissolution of a partnership firm?
Dissolution by agreement, compulsory dissolution, dissolution by notice, dissolution by court
Dissolution by merger, dissolution by acquisition, dissolution by expansion, dissolution by conversion
Dissolution by bankruptcy, dissolution by retirement, dissolution by investment, dissolution by amalgamation
Dissolution by liquidation, dissolution by amalgamation, dissolution by reconstitution, dissolution by absorption
According to section 40, how can a partnership firm be dissolved?
By court order only
By agreement between the partners
By government notification
By insolvency of a partner
Under Section 41, which of the following is NOT a case of compulsory dissolution of a firm?
A) All partners become insolvent
B) The business becomes illegal
C) A partner retires
D) All partners except one die
Fill in the blank: A firm may be dissolved on the happening of the following contingencies or events: 1. On the death of a partner, 2. On the _______ of a partner.
insolvency
retirement
appointment
promotion
According to Section 43, a partnership at will can be dissolved by _______.
giving a notice to the other partners showing his will to dissolve the firm
filing a case in the court without any notice
mutual agreement without any notice
automatic expiry of partnership after one year
Which section allows a court to dissolve a partnership firm on the suit of a partner?
Section 40
Section 41
Section 43
Section 44
A court may dissolve a partnership firm if a partner is found guilty of misconduct affecting the firm.
True
False
Differentiate between Realisation Account and Revaluation Account.
The differences are as listed in the table: Revaluation Account is for admission/retirement/death of a partner and records revised values, while Realisation Account is for dissolution and records book values.
Both accounts are used only for recording profits and losses during the year.
Realisation Account is prepared for admission of a partner, while Revaluation Account is prepared for dissolution.
Revaluation Account records only cash transactions, while Realisation Account records only non-cash transactions.
What entry would you pass for the following transaction on the dissolution of a firm having partners Vishal and Rakesh?
Realisation Account Dr. To Vishal and Rakesh’s Capital Accounts
Vishal and Rakesh’s Capital Accounts Dr. To Realisation Account
Cash Account Dr. To Realisation Account
Realisation Account Dr. To Cash Account
Fill in the blank: In the journal entry for payment of realisation expenses, Realisation is debited by ______ and Cash is credited by the same amount. (Being realisation expenses paid off)
3200
2500
4000
1500
Fill in the blank: In the journal entry for payment to creditors, Realisation is debited by ______ and Cash is credited by the same amount. (Being Crs. paid off)
88000
75000
92000
65000
Fill in the blank: In the journal entry for realisation of stock, Cash is debited by ______ and Realisation is credited by the same amount. (Being stock realised)
4100
5100
3500
2500
In the journal entry for transferring realisation account balance to partners' capital accounts, Realisation is debited by ______, and V's capital and R's capital are credited by ______ each. (Being realisation a/c balance transferred to partner's capital a/cs)
48000, 24000
24000, 48000
48000, 48000
24000, 24000
