Partnership

Dissolution

Easy

common

All assets (except cash/bank and fictitious assets) are transferred to the ................... side of ................... Account.

Debit/Capital

Credit/Capital

Realization/Capital

Debit/Realization

✅ Correct Option: 4

When a partnership firm is dissolved, a Realization Account is prepared to ascertain the profit or loss on realization of assets and settlement of liabilities.

All assets (except cash/bank and fictitious assets) are transferred to the Debit side of Realization Account.

Reason for exceptions:

Cash/Bank → Not transferred because it is needed to make payments during dissolution and appears separately in the Cash/Bank Account

Fictitious Assets → Not transferred because they have no realizable value (examples: Preliminary Expenses, Discount on Issue of Shares). These are directly written off by debiting Partners' Capital Accounts

Entry for transfer of assets:

Realization A/c ... Dr

To Various Assets A/c

Since assets are being transferred to the Realization Account, they appear on its debit side (as per the rule of real accounts - what comes in is debited).

2025: 4 June Shift 2

Which of the following combination of statements are true about dissolution-

(A). A firm is compulsorily dissolved when a partner decide to retire.

(B). Dissolution of a partnership is different from dissolution of a firm.

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

(D). Dissolution of a firm necessarily involves dissolution of partnership.

Choose the correct answer from the options given below:

2025: 30 May Shift 2

Unrecorded liabilities when paid are shown in:

2022: 20 Aug Shift 2

On 1/4/22, X and Y decided to dissolve their firm. On that date of dissolution, Goodwill appeared at Rs. 5,00,000 in the Balance Sheet. Goodwill will be:

2025: 26 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Dissolution of firm by agreement	(I) When a partner becomes insane
(B) Compulsory dissolution of firm	(II) With the consent of all partners
(C) Dissolution of firm by notice	(III) When business of a firm becomes illegal
(D) Dissolution of firm by Court	(IV) At the request of any one partner

Choose the correct answer from the options given below:

2023: 29 May Shift 2

When a creditor accepts an asset whose value is more than the amount due to him, he will _______ the excess amount which will be credited to _______ Account.

2025: 31 May Shift 1

After transferring liabilities like creditors and bills payables in the Realisation Account, in the absence of any information regarding their payment, such liabilities are treated as:

All assets (except cash/bank and fictitious assets) are transferred to the ................... side of ................... Account.

Solution

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)