CUET Accountancy - Partnership - Dissolution | Free Questions - Page 9

Q1:

2025: 13 May Shift 1

Partnership

>

Dissolution

Medium

Which statements are true about the dissolution of a partnership-

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

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

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

(D) Dissolution of partnership can not take place without intervention of the court.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A) and (B) only

(C) and (D) only

(B), (C) and (D) only

Correct Answer

Option 2

Correct Answer

Explanation

Q2:

2025: 13 May Shift 1

Partnership

>

Dissolution

Easy

On the dissolution of a firm, creditor's are transferred to:

Cash Account

Bank Account

Realisation Account

Partners Capital Account

Correct Answer

Option 3

Correct Answer

Explanation

Q3:

2025: 13 May Shift 1

Partnership

>

Dissolution

Medium

Which of the following indicate the situation of compulsory dissolution.

When a partner becomes insane.

On the death of a partner

When the business of the firm becomes illegal.

When a partner becomes permanently incapable of performing his duties as a partner

Correct Answer

Option 3

Correct Answer

Explanation

Q4:

2025: 13 May Shift 1

Partnership

>

Dissolution

Medium

When realization expenses are paid by the firm on behalf of a partner, such expenses are debited to:

Realisation Account

Partners capital account

Partners Loan account

Bank Account

Correct Answer

Option 2

Correct Answer

Explanation

Q5:

2025: 13 May Shift 1

Partnership

>

Dissolution

Easy

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.

36

37

38

39

Correct Answer

Option 4

Correct Answer

Explanation

Q6:

2024

Partnership

>

Dissolution

Medium

On dissolution of a firm, bank overdraft is transferred to:

Bank Account

Realisation Account

Partners' Capital Account

Partners' Loan Account

Correct Answer

Option 2

Correct Answer

Explanation

Q7:

2024

Partnership

>

Dissolution

Easy

G, K and B were partners running a partnership for last 10 years, sharing profit and loss in the ratio of 5 : 3 : 2. Post Covid, their firm was affected badly and started incurring losses. On 31st March, 2023 they all decided to dissolve the firm due to continuous losses. Their capital balances were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively. Firm had liabilities ₹ 80,000, Cash balance ₹ 40,000, other Sundry Assets ₹ 8,50,000 and P&L A/c constituted the rest. Assets realised at 80% and liabilities were paid in full. There was unrecorded liability of ₹ 50,000 which was settled at ₹ 40,000. Realisation expenses amounted to ₹ 30,000, being paid by G on behalf of the firm.

What is the mode of dissolution of the firm followed by G, K and B?

Dissolution by Agreement

On the happening of certain contingencies

Dissolution by Notice

Compulsory Dissolution

Correct Answer

Option 1

Correct Answer

Explanation

Q8:

2024

Partnership

>

Dissolution

Medium

G, K and B were partners running a partnership for last 10 years, sharing profit and loss in the ratio of 5 : 3 : 2. Post Covid, their firm was affected badly and started incurring losses. On 31st March, 2023 they all decided to dissolve the firm due to continuous losses. Their capital balances were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively. Firm had liabilities ₹ 80,000, Cash balance ₹ 40,000, other Sundry Assets ₹ 8,50,000 and P&L A/c constituted the rest. Assets realised at 80% and liabilities were paid in full. There was unrecorded liability of ₹ 50,000 which was settled at ₹ 40,000. Realisation expenses amounted to ₹ 30,000, being paid by G on behalf of the firm.

Determine the amount of Profit and Loss Account.

(Cr.) ₹ 90,000

(Dr.) ₹ 90,000

(Cr.) ₹ 1,30,000

(Dr.) ₹ 1,30,000

Correct Answer

Option 2

Correct Answer

Explanation

Q9:

2024

Partnership

>

Dissolution

Medium

G, K and B were partners running a partnership for last 10 years, sharing profit and loss in the ratio of 5 : 3 : 2. Post Covid, their firm was affected badly and started incurring losses. On 31st March, 2023 they all decided to dissolve the firm due to continuous losses. Their capital balances were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively. Firm had liabilities ₹ 80,000, Cash balance ₹ 40,000, other Sundry Assets ₹ 8,50,000 and P&L A/c constituted the rest. Assets realised at 80% and liabilities were paid in full. There was unrecorded liability of ₹ 50,000 which was settled at ₹ 40,000. Realisation expenses amounted to ₹ 30,000, being paid by G on behalf of the firm.

Determine Gain/Loss on Realisation.

Loss ₹ 2,40,000

Gain ₹ 24,000

Loss ₹ 1,70,000

Loss ₹ 2,10,000

Correct Answer

Option 1

Correct Answer

Explanation

Q10:

2024

Partnership

>

Dissolution

Easy

G, K and B were partners running a partnership for last 10 years, sharing profit and loss in the ratio of 5 : 3 : 2. Post Covid, their firm was affected badly and started incurring losses. On 31st March, 2023 they all decided to dissolve the firm due to continuous losses. Their capital balances were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively. Firm had liabilities ₹ 80,000, Cash balance ₹ 40,000, other Sundry Assets ₹ 8,50,000 and P&L A/c constituted the rest. Assets realised at 80% and liabilities were paid in full. There was unrecorded liability of ₹ 50,000 which was settled at ₹ 40,000. Realisation expenses amounted to ₹ 30,000, being paid by G on behalf of the firm.

The entry for realisation expenses in above case study will be:

Realisation A/c Dr.

To Cash A/c

Realisation A/c Dr.

To G's Capital A/c

G's Capital A/c Dr.

To Realisation A/c

Cash A/c Dr.

To Realisation A/c

Correct Answer

Option 2

Correct Answer

Explanation

Q11:

2024

Partnership

>

Dissolution

Easy

G, K and B were partners running a partnership for last 10 years, sharing profit and loss in the ratio of 5 : 3 : 2. Post Covid, their firm was affected badly and started incurring losses. On 31st March, 2023 they all decided to dissolve the firm due to continuous losses. Their capital balances were ₹ 4,00,000, ₹ 3,00,000 and ₹ 2,00,000 respectively. Firm had liabilities ₹ 80,000, Cash balance ₹ 40,000, other Sundry Assets ₹ 8,50,000 and P&L A/c constituted the rest. Assets realised at 80% and liabilities were paid in full. There was unrecorded liability of ₹ 50,000 which was settled at ₹ 40,000. Realisation expenses amounted to ₹ 30,000, being paid by G on behalf of the firm.

Existing Profit and Loss Account in the books of the firm will be shared/borne by partners in the ratio:

5 : 3 : 2

Equal Ratio

4 : 3 : 2

Ratio of closing capital claims

Correct Answer

Option 1

Correct Answer

Explanation

Q12:

2023: 20 June Shift 2

Partnership

>

Dissolution

Easy

The dissolution of Partnership may take place due to:

A. Retirement of Partner

B. Death of Partner

C. Insolvency of Partner

D. Admission of New Partner

E. Completion of Venture, if partnership formed for that purpose

Choose the correct answer from the options given below:

A and B only

A, B and C only

A, B, C and D only

A, B, C, D and E only

Correct Answer

Option 4

Correct Answer

Explanation

Q13:

2023: 20 June Shift 2

Partnership

>

Dissolution

Easy

Select out of the following that is not considered as one of the modes of reconstitution of a partnership firm.

Change in the profit sharing ratio among the existing partners

Admission of a new partner

Retirement of an existing partner

Dissolution of a partnership firm

Correct Answer

Option 4

Correct Answer

Explanation

Q14:

2023: 20 June Shift 2

Partnership

>

Dissolution

Medium

Identify which of the following will lead to dissolution of partnership but NOT dissolution of the firm

When the business of the firm becomes illegal

When a partner becomes insane

When a partner persistently commits breach of partnership agreement

When there is change in existing profit sharing ratio among partners

Correct Answer

Option 4

Correct Answer

Explanation

Q15:

2023: 20 June Shift 2

Partnership

>

Dissolution

Medium

Arrange the following in the context of dissolution of partnership firm.

A. Payment of loan from Partners

B. Payment of secured outsider's liabilities

C. Realisation of assets into cash

D. Settlement of partner's capital

E. Payment of unsecured outsider's liability

Choose the correct answer from the options given below:

A, B, C, D, E

C, B, E, A, D

B, C, D, E, A

D, E, A, B, C

Correct Answer

Option 2

Correct Answer

Explanation

Q16:

2023: 20 June Shift 2

Partnership

>

Dissolution

Medium

Unrecorded assets when taken over by a partner on dissolution are shown in:

Debit of Realisation Account

Debit of Bank Account

Credit of Realisation Account

Credit of Bank Account

Correct Answer

Option 3

Correct Answer

Explanation

Q17:

2023: 11 June Shift 3

Partnership

>

Dissolution

Medium

Select the entry that is to be made when a creditor accepts an asset in full and final settlement of his account.

Realisation A/c Dr

To Bank A/c

Bank A/c Dr

To Realisation A/c

Creditor A/c Dr

To Asset A/c

No Entry

Correct Answer

Option 4

Correct Answer

Explanation

Q18:

2023: 11 June Shift 3

Partnership

>

Dissolution

Easy

Realisation A/c is debited with __________ on the dissolution of firm.

Transfer of all assets that are to be Realised

Transfer of all external Liabilities of the firm

Cash received on sale of assets

Any asset that was taken over by any one of partner

Correct Answer

Option 1

Correct Answer

Explanation

Q19:

2023: 11 June Shift 3

Partnership

>

Dissolution

Medium

Select the way by which provisions appearing in the Balance Sheet of a partnership firm are closed at the time of firm's dissolution.

Transferring them to the Credit of Partner's Capital A/c

Transferring them to the Credit of Partner's Current A/c

Transferring them to the Credit of Realisation A/c

Transferring them to the Debit of Realisation A/c

Correct Answer

Option 3

Correct Answer

Explanation

Q20:

2023: 11 June Shift 3

Partnership

>

Dissolution

Medium

Mukund's Loan of Rs. 50,000 to the firm, was settled at Rs. 55,000 at the time of firm's dissolution, where Mukund was one of the partner. What entry will be passed ?

Mukund Loan A/c Dr 50,000

Mukund Capital A/c Dr 5,000

To Cash A/c 55,000

Mukund Loan A/c Dr 50,000

Realisation A/c Dr 5,000

To Cash A/c 55,000

Mukund Loan A/c Dr 55,000

To Cash A/c 55,000

Cash A/c Dr 55,000

To Mukund Loan A/c 50,000

To Realisation A/c 5,000

Correct Answer

Option 2

Correct Answer

Explanation

Q21:

2023: 11 June Shift 3

Partnership

>

Dissolution

Medium

Which of the following will not be shown in Realisation Account ?

Unrecorded Asset realised

Unrecorded Liabilities paid off

Partner's Loan to the firm

Realisation Expenses

Correct Answer

Option 3

Correct Answer

Explanation

Q22:

2023: 29 May Shift 2

Partnership

>

Dissolution

Easy

Arrange following in a sequence in which amount realised from Assets will be utilised to pay.

A. Partner's Loan

B. Partner's Capital

C. Secured debts of the firm

D. Unsecured debts of the firm

E. Residue to partners

Choose the correct answer from the options given below:

C, D, E, A, B

C, D, E, B, A

C, D, A, B, E

C, D, A, E, B

Correct Answer

Option 3

Correct Answer

Explanation

Q23:

2023: 29 May Shift 2

Partnership

>

Dissolution

Easy

Out of the following when will the need for valuation of goodwill does not arise:

Admission of a partner

Retirement of a partner

Dissolution of partnership firm

Death of a partners

Correct Answer

Option 3

Correct Answer

Explanation

Q24:

2023: 29 May Shift 2

Partnership

>

Dissolution

Medium

Match List I with List II

LIST I	LIST II
A. Transfer of accumulated profits	I. Realisation account
B. Unrecorded asset sold on dissolution of firm	II. Profit and Loss Account
C. Manager's commission	III. Profit and Loss Appropriation Account
D. Partner's commission	IV. Partner's Capital account

Choose the correct answer from the options given below:

A-IV, B-I, C-III, D-II

A-IV, B-I, C-II, D-III

A-IV, B-II, C-III, D-I

A-IV, B-III, C-II, D-I

Correct Answer

Option 2

Correct Answer

Explanation

Q25:

2023: 29 May Shift 2

Partnership

>

Dissolution

Medium

Meena and Tina are partners in a firm and sharing profit as 3:2. They decided to dissolve their firm on March 31, 2017 when their Balance Sheet was as follows:

Balance Sheet Meena and Tina as on March 31, 2017

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital		Machinery	70,000
Meena 90,000		Investments	50,000
Tina 80,000	1,70,000	Stock	22,000
Sundry creditors	60,000	Sundry Debtors	1,03,000
Bills payable	20,000	Cash at bank	5,000
	2,50,000		2,50,000

The assets and liabilities were disposed off as follows:

a. Machinery were given to creditors in full settlement of their account and stock were given bill payable in full settlement.

b. Investment were took over by Tina at book value. Sundry debtors of book value Rs. 50,000 took over by Meena at 10% less and remaining debtors realised Rs. 51,000.

c. Realisation expenses amount to Rs. 2,000.

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.

Pay, Bank

Not pay, Creditors

Pay, Realisation

Not pay, Realisation

Correct Answer

Option 3

Correct Answer

Explanation

Q26:

2023: 29 May Shift 2

Partnership

>

Dissolution

Easy

Meena and Tina are partners in a firm and sharing profit as 3:2. They decided to dissolve their firm on March 31, 2017 when their Balance Sheet was as follows:

Balance Sheet Meena and Tina as on March 31, 2017

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital		Machinery	70,000
Meena 90,000		Investments	50,000
Tina 80,000	1,70,000	Stock	22,000
Sundry creditors	60,000	Sundry Debtors	1,03,000
Bills payable	20,000	Cash at bank	5,000
	2,50,000		2,50,000

The assets and liabilities were disposed off as follows:

a. Machinery were given to creditors in full settlement of their account and stock were given bill payable in full settlement.

b. Investment were took over by Tina at book value. Sundry debtors of book value Rs. 50,000 took over by Meena at 10% less and remaining debtors realised Rs. 51,000.

c. Realisation expenses amount to Rs. 2,000.

Which mode of dissolution is highlighted in the above case?

Compulsory Dissolution

Dissolution by agreement

Dissolution by court

Dissolution on happening of contingencies

Correct Answer

Option 2

Correct Answer

Explanation

Q27:

2023: 29 May Shift 2

Partnership

>

Dissolution

Medium

Meena and Tina are partners in a firm and sharing profit as 3:2. They decided to dissolve their firm on March 31, 2017 when their Balance Sheet was as follows:

Balance Sheet Meena and Tina as on March 31, 2017

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital		Machinery	70,000
Meena 90,000		Investments	50,000
Tina 80,000	1,70,000	Stock	22,000
Sundry creditors	60,000	Sundry Debtors	1,03,000
Bills payable	20,000	Cash at bank	5,000
	2,50,000		2,50,000

The assets and liabilities were disposed off as follows:

a. Machinery were given to creditors in full settlement of their account and stock were given bill payable in full settlement.

b. Investment were took over by Tina at book value. Sundry debtors of book value Rs. 50,000 took over by Meena at 10% less and remaining debtors realised Rs. 51,000.

c. Realisation expenses amount to Rs. 2,000.

Identify the amount realised in cash from Sundry Debtors.

Rs. 96,000

Rs. 1,03,000

Rs. 1,00,000

Rs. 51,000

Correct Answer

Option 4

Correct Answer

Explanation

Q28:

2023: 29 May Shift 2

Partnership

>

Dissolution

Easy

Meena and Tina are partners in a firm and sharing profit as 3:2. They decided to dissolve their firm on March 31, 2017 when their Balance Sheet was as follows:

Balance Sheet Meena and Tina as on March 31, 2017

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital		Machinery	70,000
Meena 90,000		Investments	50,000
Tina 80,000	1,70,000	Stock	22,000
Sundry creditors	60,000	Sundry Debtors	1,03,000
Bills payable	20,000	Cash at bank	5,000
	2,50,000		2,50,000

The assets and liabilities were disposed off as follows:

a. Machinery were given to creditors in full settlement of their account and stock were given bill payable in full settlement.

b. Investment were took over by Tina at book value. Sundry debtors of book value Rs. 50,000 took over by Meena at 10% less and remaining debtors realised Rs. 51,000.

c. Realisation expenses amount to Rs. 2,000.

State Journal entry for payment of realisation expenses.

Realisation Expenses A/c Dr. Rs. 2,000 To Realisation A/c Rs. 2,000

Realisation A/c Dr. Rs. 2,000 To Realisation Expenses A/c Rs. 2,000

Realisation A/c Dr. Rs. 2,000 To Bank A/c Rs. 2,000

Bank A/c Dr. Rs. 2,000 To Realisation A/c Rs. 2,000

Correct Answer

Option 3

Correct Answer

Explanation

Q29:

2023: 29 May Shift 2

Partnership

>

Dissolution

Easy

Meena and Tina are partners in a firm and sharing profit as 3:2. They decided to dissolve their firm on March 31, 2017 when their Balance Sheet was as follows:

Balance Sheet Meena and Tina as on March 31, 2017

Liabilities	Amount (Rs.)	Assets	Amount (Rs.)
Capital		Machinery	70,000
Meena 90,000		Investments	50,000
Tina 80,000	1,70,000	Stock	22,000
Sundry creditors	60,000	Sundry Debtors	1,03,000
Bills payable	20,000	Cash at bank	5,000
	2,50,000		2,50,000

The assets and liabilities were disposed off as follows:

a. Machinery were given to creditors in full settlement of their account and stock were given bill payable in full settlement.

b. Investment were took over by Tina at book value. Sundry debtors of book value Rs. 50,000 took over by Meena at 10% less and remaining debtors realised Rs. 51,000.

c. Realisation expenses amount to Rs. 2,000.

State Journal entry for realisation of investment.

Tina's capital A/c Dr. Rs. 50,000 To Realisation A/c Rs. 50,000

Tina's Capital A/c Dr. Rs. 30,000 Meena's capital A/c Dr. Rs. 20,000 To Realisation A/c Rs. 50,000

Realisation A/c Dr. Rs. 50,000 To Tina's Capital A/c Rs. 50,000

Realisation A/c Dr. Rs. 50,000 To Tina's capital A/c Rs. 30,000 To Meena's Capital A/c Rs. 20,000

Correct Answer

Option 1

Correct Answer

Explanation

Q30:

2023: 28 May Shift 1

Partnership

>

Dissolution

Medium

According to Indian Partnership Act, 1932, when the firm is dissolved, cash received on sale of assets are applied in following order :

(A) Paying to each partner proportionately what is due to him/her on account of capital

(B) In paying the secured debts of the firm to the third parties

(C) In paying each partner proportionately what is due to him/her from the firm for advances as distinguished from capital

(D) The residue, if any shall be divided among the partner's in their profit sharing ratio

(E) In paying unsecured debt of firm to third parties

Choose the correct answer from the options given below :

(C), (B), (D), (A), (E)

(B), (E), (C), (A), (D)

(A), (B), (C), (D), (E)

(D), (C), (B), (A), (E)

Correct Answer

Option 2

Correct Answer

Explanation

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