Partnership

Dissolution

Easy

common

At the time of dissolution, when creditor accepts an asset whose value is much more than the amount due to him, he will _ the excess amount which will be credited to _ account?

Not Pay, Realisation

Pay, Realisation

Pay, Revaluation

Not pay, revaluation

✅ Correct Option: 2

At dissolution, when a creditor accepts an asset in settlement of their dues, the asset is transferred at its agreed value (which may differ from book value).

Situation Analysis:

If the agreed value of asset > Amount due to creditor

For example:

Amount due to creditor = ₹40,000
Asset given has agreed value = ₹55,000
Excess = ₹15,000

Since the creditor receives an asset worth more than what is owed, the creditor must pay the excess amount in cash to the firm.

Journal Entry:

Creditor's A/c ... Dr. ₹40,000

Bank A/c ... Dr. ₹15,000

To Realisation A/c ... ₹55,000

(Being creditor settled by transferring asset and excess amount received in cash)

The excess amount received from the creditor represents a profit on the transaction because the firm:

Got rid of a liability of ₹40,000
Gave up an asset recorded at book value
Received extra cash of ₹15,000

This profit is credited to Realisation Account, which ultimately gets distributed among partners in their profit-sharing ratio.

Therefore, the creditor will Pay the excess amount which will be credited to Realisation account.

2025: 16 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Meaning of Dissolution	(I) Section 49,of the partnership Act 1932
(B) Application of Assets	(II) Section 39,of the partnership Act 1932
(C) Private Debts Vs Firm's Debts	(III) Section 4,of the partnership Act 1932
(D) Nature of Partnership	(IV) Section 48,of the partnership Act 1932

Choose the correct answer from the options given below:

2025: 2 June Shift 2

An unrecorded asset is taken over by a creditor in full settlement in such a case

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: 27 May Shift 2

Under which condition, dissolution of a Partnership Firm by Court may take place :-

2026: 13 May Shift 1

The amount of sundry assets transferred to Realization account was Rs. 3,60,000; 50% of these have been sold at a profit of Rs. 75,000; 30% of the remaining assets were sold at a discount of 12% and remaining were taken over by Raman (a partner) at 25% above book value. At what value were the assets taken over by Raman :-

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.

At the time of dissolution, when creditor accepts an asset whose value is much more than the amount due to him, he will _________ the excess amount which will be credited to _________ account?

Solution

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CUET Accountancy Past Year Questions (Topic-Wise)

At the time of dissolution, when creditor accepts an asset whose value is much more than the amount due to him, he will _ the excess amount which will be credited to _ account?