Class 12 Accountancy Chapter 5 (Part 2) - Dissolution of partnership firm MCQs

Class 12 Accountancy Chapter 5 (Part 2) – Dissolution of partnership firm MCQ Question Answers for CUET 2024

1. Reason for which a dissolution is undertaken by court

a.when a partner becomes permanently incapable of performing his duties as a partner;

b.All of the Above

c.when a partner has transferred the whole of his interest in the firm to a third party;

d.when a partner becomes insane

2. A firm is dissolved compulsorily in the following cases

a.When the business of the firm becomes Legal After Incorporation

b.When Unbearable Loss is to be borne By Company

c.When a Major Partner gets Retired or dies

d.When all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract

3. On dissolution of a firm, a partner paid 1,500 Rs. for firm’s realisation expenses. Which account will be Credited?

a.Realisation Account

b.Cash Account

c.Capital Account of the Partner

d.Profit & Loss A/c

4. The accumulated profits reserves are transferred to

a.Partners’ capital account

b.Realisation account

c.None of these

d.Bank account

5. On dissolution of the firm, partner’s capital accounts are closed through

a.Realisation account

b.Loan account

c.Drawing’s account

d.Bank account

6. On dissolution of a firm, out of the proceeds received from the sale of assets will be paid first of all

a.Partner’s Loan to Firm

b.Partner’s Capital

c.Outside Creditors

d.Partner’s additional capital

7. On sale of assets Which account is debited?

a.Bank A/c

b.Realisation A/c

c.Profit and loss A/c

d.Revaluation A/c

8. On expenses of realisation when actual expenses are paid by the partner on behalf of the firm. Which Account is Debited?

a.Bank A/c

b.Asset A/c

c.Realisation A/c

d.Partner’s Capital A/c

9. When the firm has agreed to pay the partner a fixed amount for realisation work irrespective of the actual amount spent, such fixed amount is debited to _________Account and Credited to __________Account

a.Realisation, Capital

b.Realisation, Expenses

c.Partners’ Capital, Realisation

d.Capital, Realisation

10. At the time Dissolution, all the assets of the firm are transferred to the Realisation account At ______ Values

a.Economical

b.Book

c.Market

d.Realisable

11. On payment of liabilities which Account is Credited?

a.Realisation account

b.Liability Account

c.Bank account

d.Loan Account

12. ________ Means End of the existence of firm, and no business is transacted after It except the activities related to closing of the firm as the affairs of the firm are to be wound up by selling firm’s assets and paying its liabilities and discharging the claims of the partners.

a.Dissolution

b.Resolution

c.Reconstruction

d.Dispersion

13. At the time of dissolution of partnership firm, the amount of ‘Bills Payable’ shown in the liability side of Balance Sheet is transferred to:

a.Loan Account of Partners

b.Cash Account

c.Realisation Account

d.Capital Accounts of Partners

14. The _________Account is prepared to record the transactions relating to sale and realisation of assets and settlement of creditors

a.Profit and loss account

b.Partners’ capital account

c.Revaluation Account

d.Realisation

15. On settlement of capital accounts., Which account will be Credited?

a.Partner’s Capital A/c

b.Partners Current Account

c.Partners’ Capital Account

d.Bank Account

16. On dissolution, when a partner takes over an asset is debited

a.Realisation Account

b.Asset Account

c.Partner’s Capital Account

d.Cash Account

17. If total assets are Rs. 2,00,000; total liabilities are Rs. 40,000; amount realised on sale of assets is Rs. 1,75,000 and realisation expenses are Rs. 3,000, the profit or loss on realisation will be:

a.Loss Rs 25,000

b.Loss Rs 68,000

c.Loss Rs 28,000

d.Profit Rs12,000

18. Sundry Creditors amounted to Rs. 10000. These were paid at a discount of 5%. Realisation account will be debited by

a.9000

b.9500

c.8,400

d.7,600

19. On dissolution of a firm, partner’s loan account is transferred to

a.partner’s capital account

b.realisation account