At the time of dissolution, if an asset is taken over by a partner, what journal will be recorded in the books of the firm :- Option 1: Partner Capital A/c Dr. To Realisation A/c Option 2: Partner Capital A/c Dr. To Assets A/c Option 3: Bank A/c Dr. To Realisation A/c Option 4: Bank A/c Dr. To Assets A/c

Answer: Partner Capital A/c Dr. To Realisation A/c. Solution: When an asset is taken over by a partner during dissolution, the firm treats it as disposal of that asset. During dissolution, all assets (except cash/bank) are first transferred to the Realisation Account by debiting it. The Realisation Account acts as a master account to record all transactions related to disposal of assets and settlement of liabilities. When a partner takes over an asset: - The partner is receiving value from the firm - This reduces the partner's claim against the firm - The asset is considered as disposed off at the agreed takeover value Journal Entry: Partner's Capital A/c Dr. To Realisation A/c This entry reflects that: - Partner's Capital Account is debited because the partner is taking away an asset, which reduces their claim - Realisation Account is credited because it receives the consideration (in the form of partner's capital) for the asset disposed off The asset has already been transferred to Realisation Account earlier, so we don't credit the Asset Account again. The disposal is completed by crediting Realisation Account with the takeover value. Correct Option: 1

Partnership

Dissolution

Easy

common

At the time of dissolution, if an asset is taken over by a partner, what journal will be recorded in the books of the firm :-

Partner Capital A/c Dr.

To Realisation A/c

Partner Capital A/c Dr.

To Assets A/c

Bank A/c Dr.

To Realisation A/c

Bank A/c Dr.

To Assets A/c

✅ Correct Option: 1

When an asset is taken over by a partner during dissolution, the firm treats it as disposal of that asset.

During dissolution, all assets (except cash/bank) are first transferred to the Realisation Account by debiting it. The Realisation Account acts as a master account to record all transactions related to disposal of assets and settlement of liabilities.

When a partner takes over an asset:

The partner is receiving value from the firm
This reduces the partner's claim against the firm
The asset is considered as disposed off at the agreed takeover value

Journal Entry:

Partner's Capital A/c Dr.

To Realisation A/c

This entry reflects that:

Partner's Capital Account is debited because the partner is taking away an asset, which reduces their claim
Realisation Account is credited because it receives the consideration (in the form of partner's capital) for the asset disposed off

The asset has already been transferred to Realisation Account earlier, so we don't credit the Asset Account again. The disposal is completed by crediting Realisation Account with the takeover value.

Correct Option: 1

2025: 14 May Shift 1

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.

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

Choose the correct answer from the options given below:

2025: 14 May Shift 1

Unrecorded liabilities when paid are shown in:

2026: 24 May Shift 1

Deferred revenue expenditure appearing in the old Balance Sheet at the time of Dissolution of partnership will be:

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: 22 May Shift 2

Which of the following indicate the situation of compulsory dissolution.

2026: 11 May Shift 2

When the firm is dissolved, its books of account are to be closed and the profit or loss arising on realisation of its assets and discharge of liabilities is to be computed. For this purpose, a Realisation Account is prepared. Identify correct statements related to Realisation Account.

A. Transfer all assets (other than cash in hand, bank balance and fictitious assets, if any), and all external liabilities to this account.

B. The balance in this account is not transferred to partners' capital accounts in the profit sharing ratio.

C. The balance in this account is transferred to partners' capital accounts in the profit sharing ratio.

D. Ascertain the net effect (profit or loss) of realisation of assets and payment of liabilities.

Choose the correct answer from the options given below:

At the time of dissolution, if an asset is taken over by a partner, what journal will be recorded in the books of the firm :-

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