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Questions and Answers
In the dissolution of a partnership firm, which account is opened to record the realization of assets?
In the dissolution of a partnership firm, which account is opened to record the realization of assets?
- Partners Capital A/c
- Cash / Bank A/c
- Partners Current A/c
- Realisation A/C (correct)
When transferring liabilities in the dissolution process, which account is credited for partners' capital?
When transferring liabilities in the dissolution process, which account is credited for partners' capital?
- Partners Current A/c
- Realisation A/c
- Partners Capital A/c (correct)
- Cash / Bank A/c
Which account is debited when transferring assets in the dissolution process?
Which account is debited when transferring assets in the dissolution process?
- Realisation A/c
- Partners Capital A/c
- Cash / Bank A/c (correct)
- Partners Current A/c
What is the effect when assets are taken over by a partner during dissolution?
What is the effect when assets are taken over by a partner during dissolution?
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In the dissolution process, which account is credited when expenses are paid?
In the dissolution process, which account is credited when expenses are paid?
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Study Notes
Dissolution of a Partnership Firm
- Realization Account is opened to record the realization of assets during the dissolution process.
- Partners' Capital Account is credited when transferring liabilities in the dissolution process.
- Realization Account is debited when transferring assets in the dissolution process.
- When assets are taken over by a partner during dissolution, it has a debit effect on the partner's Capital Account.
- Bank Account is credited when expenses are paid during the dissolution process.
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