Partnership

Dissolution

Easy

common

If a partnership firm is being dissolved, a liability taken over by a partner is credited to :

Bank Account

Realisation Account

Balance Sheet

Partner's Capital Account

✅ Correct Option: 4

Answer: Partner's Capital Account

When a partner takes over a liability of the firm during dissolution (i.e., the partner personally agrees to discharge that liability), the accounting treatment is:

Realisation A/c Dr.

To Partner's Capital A/c

By taking over the liability, the partner is relieving the firm of an obligation, essentially doing the firm a favor by agreeing to pay that liability personally. This is treated as if the partner has contributed value to the firm, so their Capital Account is credited (increasing what the firm owes them), while the Realisation Account is debited (since the firm's liability is now being handled without an actual cash outflow from the firm).

2022: 30 Aug Shift 2

Due to the ill health of B, they decided to dissolve the firm. It comes under ____ form of dissolution.

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: 14 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: 26 May Shift 2

In the case of dissolution of firm, accumulated losses are transferred to:

2025: 15 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Compulsory Dissolution	(I) Partner becomes insane
(B) Dissolution by notice	(II) Death of a partner
(C) Dissolution by Court	(III) Business become illegal
(D) Dissolution on certain contingencies	(IV) Partnership at will

Choose the correct answer from the options given below:

2026: 23 May Shift 2

Match the LIST-I with LIST-II

LIST-I		LIST-II
	Item	shown in
A.	Profit on realisation	I. Debit side of Partners' Capital A/c
B.	Sale of assets	II. Debit side of Realisation A/c
C.	Fictitious assets	III. Credit side of Partners' Capital A/c
D.	Settlement of unrecorded liability	IV. Credit side of Realisation A/c

Choose the correct answer from the options given below:

If a partnership firm is being dissolved, a liability taken over by a partner is credited to :

Solution

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