Partner's current accounts are transferred to respective____ partner's accounts. Option 1: Loan Option 2: Capital Option 3: Current Option 4: Realisation

Answer: Capital. Solution: When a partnership firm is dissolved or during final settlement, partners' Current Accounts are closed by transferring their balances to the respective partners' Capital Accounts. This transfer consolidates all amounts due to or from each partner into a single account (Capital Account) for final settlement. Journal Entry: When Current Account shows a credit balance (amount due to partner):, Particulars, Debit, Credit, Partner's Current Account, xxx, To Partner's Capital Account, xxx, When Current Account shows a debit balance (amount due from partner):, Particulars, Debit, Credit, Partner's Capital Account, xxx, To Partner's Current Account, xxx, In the fluctuating capital method, where only the Capital Account is maintained, this transfer is not needed. However, in the fixed capital method where both Capital and Current Accounts exist separately, the Current Account balance must be transferred to the Capital Account before making the final payment to partners or receiving dues from them. The Capital Account ultimately shows the final amount to be paid to each partner or received from each partner after all adjustments.

Partnership

Dissolution

Easy

common

Partner's current accounts are transferred to respective________ partner's accounts.

Loan

Capital

Current

Realisation

✅ Correct Option: 2

When a partnership firm is dissolved or during final settlement, partners' Current Accounts are closed by transferring their balances to the respective partners' Capital Accounts.

This transfer consolidates all amounts due to or from each partner into a single account (Capital Account) for final settlement.

Journal Entry:

When Current Account shows a credit balance (amount due to partner):

Particulars	Debit	Credit
Partner's Current Account	xxx
$\quad$ To Partner's Capital Account		xxx

When Current Account shows a debit balance (amount due from partner):

Particulars	Debit	Credit
Partner's Capital Account	xxx
$\quad$ To Partner's Current Account		xxx

In the fluctuating capital method, where only the Capital Account is maintained, this transfer is not needed. However, in the fixed capital method where both Capital and Current Accounts exist separately, the Current Account balance must be transferred to the Capital Account before making the final payment to partners or receiving dues from them.

The Capital Account ultimately shows the final amount to be paid to each partner or received from each partner after all adjustments.

2025: 22 May Shift 2

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

2025: 22 May Shift 2

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

2025: 27 May Shift 1

Choose combination of statements that are true about dissolution-

(A) Dissolution of partnership can not take place without intervention of the court.

(B) Court can order a firm to be dissolved when a partner becomes insane.

(D) A partnership is dissolved when there is a death of a partner.

Choose the correct answer from the options given below:

(B) and (D) only
(A), (B) and (D) only
(A) and (D) only
(B), (C) and (D) only

2025: 29 May Shift 2

At the time of dissolution, a firm transferred Rs.100,000 Assets to the realization account and 50% of the assets were taken over by Kiran at 20% discount. How much net assets were taken over by Kiran?

2022: 30 Aug Shift 2

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.1000 will be debited to

2025: 3 June Shift 1

On dissolution of a partnership firm, the bills payable is transferred to :

Partner's current accounts are transferred to respective________ partner's accounts.

Solution

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