Question

On the dissolution of a partnership firm, there were debtors of ₹34,000. Debtors of ₹1,000 became bad, and 60% was realized from the remaining debtors. Which account will be debited and by how much amount on the realization from debtors?

• A. Realisation A/c by \rupee 33,000
• B. Profit \& Loss A/c by \rupee 1,000
• C. Cash A/c by \rupee 19,800
• D. Debtors A/c by \rupee 14,200

Hint:

In disSolution accounts, bad debts are written off, and the amount realized is credited to the Cash Account based on the percentage of recovery.

Answer 1

The Correct Option is C

The amount realized from debtors: \[ \text{Total Debtors} - \text{Bad Debts} = ₹34,000 - ₹1,000 = ₹33,000 \] Amount realized is 60% of ₹33,000: \[ \text{Amount Realized} = 60\% \times ₹33,000 = ₹19,800 \] Hence, the Cash Account will be debited by ₹19,800.