Question:
When realisation expenses are paid by a partner on behalf of the firm, then :
When realisation expenses are paid by a partner on behalf of the firm, then :
Show Hint
If a partner pays realisation expenses for the firm, his capital account is credited.
Updated On: Jul 4, 2025
- Realisation A/c is debited
- Cash A/c is credited
- Partner’s Capital A/c is debited
- Partner’s Capital A/c is credited
Hide Solution
Verified By Collegedunia
The Correct Option is D
Solution and Explanation
When dissolution takes place, realisation expenses are incurred by the firm to close the books and dispose of assets and liabilities. If a partner pays such expenses from his personal resources on behalf of the firm, the firm does not need to pay from its cash/bank balance.
In this case, the partner is effectively contributing that amount to the firm, and thus his capital account is credited to reflect the payment made on behalf of the firm.
Journal Entry:
Realisation A/c Dr.\hspace{1cm}To Partner’s Capital A/c
In this case, the partner is effectively contributing that amount to the firm, and thus his capital account is credited to reflect the payment made on behalf of the firm.
Journal Entry:
Realisation A/c Dr.\hspace{1cm}To Partner’s Capital A/c
Was this answer helpful?
0
0
Top Questions on Dissolution of Partnership Firms
- Madhavan, Chatterjee and Pillai were partners in a firm sharing profits and losses in the ratio of 2 : 1 : 2. On 31stMarch, 2024, their Balance Sheet was as follows :
Balance Sheet of Madhavan, Chatterjee and Pillai as at 31st March, 2024
On the above date, the firm was dissolved and the following transactions took place :Liabilities Amount (₹) Assets Amount (₹) Creditors 1,10,000 Cash at Bank 4,05,000 Outstanding Expenses 17,000 Stock 2,20,000 Mrs. Madhavan’s Loan 2,00,000 Debtors 95,000 Chatterjee’s Loan 1,70,000 Less: Provision for Doubtful Debts (5,000) Capitals: Madhavan – 2,00,000 Land and Building 1,82,000 Chatterjee – 1,00,000 Plant and Machinery 1,00,000 Pillai – 2,00,000 Total 9,97,000 Total 9,97,000
Debtors were taken over by the creditors in full settlement of their claim.
Madhavan agreed to pay Mrs. Madhavan’s loan.
50% of the stock was taken over by Chatterjee at 10% less than the book value. The remaining stock was sold at a profit of 20%.
Land and Building was taken over by Pillai for \(₹1,00,000\) and Plant and Machinery was sold as scrap for \(₹20,000\).
Realisation expenses \(₹17,000\) were paid by cheque.
Prepare Realisation Account.- CBSE CLASS XII - 2025
- Accountancy
- Dissolution of Partnership Firms
- On dissolution, Mohan's loan of ₹10,000 will be discharged by crediting:
- CBSE CLASS XII - 2025
- Accountancy
- Dissolution of Partnership Firms
- On the dissolution of the partnership firm of Raman, Hari and Suresh, realisation expenses \(₹17,000\) were paid by a debtor of \(₹75,000\) on behalf of the firm. The remaining amount was received from him along with interest of \(₹2,000\) for delayed payment. Realisation Account will be ___________ by ___________.
- CBSE CLASS XII - 2025
- Accountancy
- Dissolution of Partnership Firms
- On dissolution of a firm, there was an unrecorded asset of \(₹15,000\) which was taken over by a partner at \(₹13,000\). Partner’s capital account will be debited by :
- CBSE CLASS XII - 2025
- Accountancy
- Dissolution of Partnership Firms
- Madhur and Neeraj were partners in a firm sharing profits and losses in the ratio of 3 : 2. The Balance Sheet as at 31st March, 2024 was as follows: Balance Sheet of Madhur and Neeraj as at 31st March, 2024The firm was dissolved on the above date and the following transactions took place:
Liabilities Amount (₹) Assets Amount (₹) Capitals: Machinery 7,00,000 Madhur 9,00,000 Investments 4,00,000 Neeraj 8,00,000 Debtors 11,00,000 Creditors 6,00,000 Stock 2,00,000 Bills Payable 2,00,000 Cash at Bank 1,00,000 Total 25,00,000 Total 25,00,000
Machinery was taken over by creditors in full settlement of their account.
Investments were taken over by Neeraj at \u20b9 5,00,000.
One of the debtors of \u20b9 1,00,000 was untraceable. Remaining debtors were realised at 10% less.
Stock was taken over by Madhur at 50% discount.
Realisation expenses amounting to \u20b9 1,00,000 were paid by Madhur.
Prepare Realisation Account.- CBSE CLASS XII - 2025
- Accountancy
- Dissolution of Partnership Firms
View More Questions
Questions Asked in CBSE CLASS XII exam
- If $P(A) = \frac{1}{7}$, $P(B) = \frac{5}{7}$ and $P(A \cap B) = \frac{4}{7}$, then $P(A | B)$ is:
- CBSE CLASS XII - 2025
- Probability
- In case of association, abnormal molar mass of solute will:
- CBSE CLASS XII - 2025
- Solutions
- A student tries to tie ropes, parallel to each other from one end of the wall to the other. If one rope is along the vector $3\hat{i} + 15\hat{j} + 6\hat{k}$ and the other is along the vector $2\hat{i} + 10\hat{j} + \lambda \hat{k}$, then the value of $\lambda$ is:
- If \( \int \frac{1}{2x^2} \, dx = k \cdot 2x + C \), then \( k \) is equal to:
- CBSE CLASS XII - 2025
- Integration
- Find the angle at which the given lines are inclined to each other: \[ l_1: \frac{x - 5}{2} = \frac{y + 3}{1} = \frac{z - 1}{-3} \] \[ l_2: \frac{x}{3} = \frac{y - 1}{2} = \frac{z + 5}{-1} \]
View More Questions