Deck 6: Dissolution and Settlement of Partnership Firm

Question 1

When a liability is assumed by a partner his capital account is ----------

A)Debited
B)Credited
C)deducted
D)None of these

Answer 1

Credited

Question 2

When an unrecorded asset is taken over by one of the partners, his capital account is ----------------

A)Debited
B)Credited
C)Added
D)None of these

Answer 2

Debited

Question 3

The account opened to close the various assets and liabilities of the firm on dissolution is called ------------- account

A)Revaluation
B)Amalgamation
C)Realization
D)Reduction

Answer 3

Realization

Question 4

When a firm is dissolved, project or loss on realization is shared by the partner's in their ------------- ratio

A)Profit sharing ratio
B)Capital contribution
C)Asset
D)None of these

Question 5

In the event of dissolution of firm the partners personal assets are first used for payment of -------------- liabilities

A)Firm's
B)Outsiders
C)External
D)Personal

Question 6

Goodwill appearing in the balance sheet at Rs. 10,000 proved to be valueless, is not to be recorded on the ------------------ side of realization account

A)Debit
B)Credit
C)Both
D)None of these

Question 7

On dissolution, partners loan, if any, will be paid ---------

A)First
B)Second
C)Third
D)Lastly

Question 8

-----------of partnership firm means closing the business of the firm

A)Admission
B)Retirement
C)Insolvency
D)Dissolution

Question 9

On dissolution, all assets except cash are transferred to ----------- of realization account

A)Debit
B)Credit
C)Both
D)None of these

Question 10

If a partner takes over some assets for value on dissolution, realization account should be -----------

A)Debited
B)Credited
C)Both
D)None of these

Question 11

In the case of dissolution of the firm , the account opened for closing various items in the balance sheet is called ----------------

A)Deficiency account
B)Revolution account
C)Realization account
D)None of these

Question 12

A partnership which can be dissolved at any time by giving notice to other partners is known as ------------------

A)Particular partnership
B)Partnership at will
C)General partnership
D)None of these

Question 13

Liabilities to third parties are paid -------------

A)First
B)Second
C)Third
D)Lastly

Question 14

The ------ has distinguished the 'dissolution of partnership' from 'dissolution of firm'.

A)Companies act 1956
B)Banking regulation act 1949
C)Indian partnership act 1932
D)Insurance act 1938

Question 15

Dissolution of a firm leads to

A)Continuing of business with the remaining partners
B)Closure of business
C)Merger with another firm
D)None of these

Question 16

Amount advanced by partner over and above the capital is paid

A)Before paying outside debts
B)After paying outside debts
C)Along with outside debts
D)Last along with capital

Question 17

The nominal account prepared to close the account of business is --------------

A)Revaluation account
B)Realization account
C)Profit & Loss appropriation account
D)None of these

Question 18

Realization account is closed by transfer of profit/loss to

A)Cash account
B)Balance sheet
C)Capital accounts
D)Profit and loss account

Question 19

Realization account Dr. To partner's capital a/c; this entry is recorded when

A)Profit is transferred
B)Unrecorded liability is discharged
C)Asset taken over
D)(a) and (b)

Question 20

Realization account Dr. To asset a/c, this entry is written

A)To open the asset account
B)To close the asset account
C)To transfer the profit on asset account
D)None of these

Question 21

Find the odd one

A)Retirement of a partner
B)Death of a partner
C)All the partners except one become insolvent
D)Admission of a partner

Question 22

-------------- is a situation where in existing state of arrangement is changed.

A)Re- possession
B)Insolvency
C)Reconstruction
D)Dissolution

Question 23

---------------- of the Indian Partnership Act, 1932 states that when the partnership between all the partners of a firm comes to an end, it is called dissolution of the firm

A)Section 5
B)Section 39
C)Section 50
D)Section 93

Question 24

When the relation of partnership among different partners changes without affecting the entity of the firm it is called------

A)Dissolution of partnership
B)Dissolution of firm
C)Dissolved by mutual agreement
D)Termination