Match List-I with List-II
List-I List-II (A) On dissolution of a firm, creditors is transferred to: (I) Bank account is credited (B) Unrecorded liabilities when paid: (II) Realization Account (C) When realization expenses are paid by the firm on behalf of a partner, such expenses are (III) Bank account is debited. (D) When unrecorded assets are sold (IV) Partner's Capital Account
Choose the correct answer from the options given below:
Match List-I with List-II
| List-I | List-II |
|---|---|
| (A) On dissolution of a firm, creditors is transferred to: | (I) Bank account is credited |
| (B) Unrecorded liabilities when paid: | (II) Realization Account |
| (C) When realization expenses are paid by the firm on behalf of a partner, such expenses are | (III) Bank account is debited. |
| (D) When unrecorded assets are sold | (IV) Partner's Capital Account |
Choose the correct answer from the options given below:
Solution
Looking at each statement in List-I and finding the correct match:
(A) On dissolution of a firm, creditors is transferred to:
On dissolution, all liabilities (including creditors) are transferred to Realization Account. The entry is:
Creditors A/c Dr
To Realization A/c
So (A) matches with (II) Realization Account
(B) Unrecorded liabilities when paid:
When unrecorded liabilities are discovered and paid, the entry is:
Realization A/c Dr
To Bank A/c
The payment results in Bank account is credited.
So (B) matches with (I) Bank account is credited
(C) When realization expenses are paid by the firm on behalf of a partner, such expenses are:
If a partner agreed to bear realization expenses but the firm actually pays them, the firm is paying on the partner's behalf. The entry is:
Partner's Capital A/c Dr
To Bank A/c
The amount is debited to Partner's Capital Account since the firm has paid on his behalf.
So (C) matches with (IV) Partner's Capital Account
(D) When unrecorded assets are sold:
When unrecorded assets (assets not recorded in books) are sold, cash is received. The entry is:
Bank A/c Dr
To Realization A/c
This results in Bank account is debited.
So (D) matches with (III) Bank account is debited
The correct matching is: (A) - (II), (B) - (I), (C) - (IV), (D) - (III)
Correct Answer: Option 1
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2022: 15 July Shift 2