MCQs For NCERT Class 12 Accountancy Chapter 5 Dissolution Of Partnership Firm

Please refer to the MCQ Questions for Class 12 Accountancy Chapter 5 Dissolution Of Partnership Firm with Answers. The following Dissolution Of Partnership Firm Class 12 Accountancy MCQ Questions has been designed based on the latest syllabus and examination pattern for Class 12. Our experts have designed MCQ Questions for Class 12 Accountancy with Answers for all chapters in your NCERT Class 12 Accountancy book.

Dissolution Of Partnership Firm Class 12 MCQ Questions with Answers

See below Dissolution Of Partnership Firm Class 12 Accountancy MCQ Questions, solve the questions and compare your answers with the solutions provided below.

Question.On dissolution of a firm fictitious assets are transferred to:     
(a) credit side of partners capital account
(b) debit side of realisation account 
(c) debit side of partners capital account
(d) credit side of realisation account

Question. Section 41 of partnership act 1932 deals with dissolution of a firm         
(a) by mutual agreement 
(b) compulsory dissolution correct
(c) by notice 
(d) by order of court.

Question. On dissolution of a firm in which ratio profit and loss on realisation is distributedamong the partners.
(a) capital ratio
(b) profit sharing ratio
(c) equally
(d) in the ratio of amount due to each partner.

Question.  At the time of firm’s dissolution credit balance of profit and loss account is creditedto .
(a) realisation account
(b) partners capital account
(c) cash account
(d) profit and loss account.

Question. At the time of dissolution total assets are worth Rs3,00,000 and external liabilities areworth Rs1,20,000. If assets realised 120% and realisation expenses paid were
Rs4,000, then profit/loss on realisation will be.
(a) Profit Rs60,000
(b) Loss Rs60,000
(c) Loss Rs56,000
(d) Profit Rs56,000

Question. When realisation expenses are to be borne by a partner, actual realisation expense iscredited to.
(a) Partners capital a/c
(b) Cash a/c
(c) Realisation a/c
(d) None of the above

Question. New ratio is not to be calculated on.
(a) Admission of a partner
(b) retirement of a partner
(c) death of a partner
(d) dissolution of a partnership 

Question. Realisation account is a .
(a) personal account
(b) real account
(c) nominal account
(d) none of the above.

Question. On firm’s dissolution which of the following account is prepared at the last?
(a) Realisation account
(b) partners capital account
(c) cash account partners
(d) loan account

Question.AB and C are partners. The firm had given a loan of Rs20,000 to (b) They decided todissolve the firm. In the event of dissolution the loan will be settled by transferring it
to the.
(a) debit side of realisation account
(b) transferring it to the credit side of realisation account
(c) transfer it to the debit side of B’s capital account
(d) B paying A and C privately.

Question. At the time of dissolution of partnership an unrecorded asset taken by X a partner isdebited to.
(a) X capital account
(b) realisation account
(c) cash account
(d) none of the above

Question.On dissolution of the firm amount received from sale of unrecorded asset is creditedto .
(a) partner’s capital account.
(b) profit and loss account
(c) cash account
(d) realisation account

Question. In case of dissolution, total creditors of the firm were Rs40,000; creditors worthRs10000 were given a piece of furniture costing Rs8000 in full and final settlement.Remaining creditors allowed a discount of 10%. What will be the the amount withwhich cash will be credited in the realisation account for payment to creditors.
(a) 28,000
(b) 27,000correct.
(c) 20,000
(d) 25,000

Question. On dissolution of a firm fictitious assets are transferred to.
(a) credit side of partners capital account
(b) debit side of realisation account
(c) debit side of partners capital account
(d) credit side of realisation account

Question. On dissolution the balance of partners capital account appearing on the credit side ofthe balance sheet is transferred to .
(a) debit side of realisation account
(b) credit side of realisation account
(c) debit side of partners capital account
(d) credit side of partners capital account.

Question. Settlement of accounts in case of dissolution of partnership is dealt with which sectionof partnership act 1932?
(a) Section 45
(b) section 46
(c) section 47
(d) section 48

Question.In case of dissolution of partnership there was no workmen compensation fund andfirm had to pay Rs3000 as compensation to workers where will be this Rs300
recorded in the books of accounts?
(a) debit side of realisation account
(b) credit side of realisation account
(c) debit side of partners capital account
(d) credit side of partners capital account.

Question. On dissolution of a firm Goodwill appearing in the balance sheet is transferred to.
(a) capital account of partners
(b) cash account
(c) debit side of realisation account
(d) credit side of realisation account.

Question. Court may order dissolution of partnership firm
(a) when a partner has become of unsound mind
(b) when a partner is permanently incapacitated
(c) when a partner is found guilty of misconduct
(d) all of the above.

Question.Section 41 of partnership act 1932 deals with dissolution of a firm
(a) by mutual agreement
(b) compulsory dissolution correct
(c) by notice
(d) by order of court.

Question. Which of the following is paid first in case of dissolution of partnership firm?
(a) Realisation expenses
(b) External liabilities
(c) Secured loan
(d) Partner’s loan

Question. In case of dissolution A one of the partner was paid only RS5000 for his loan to thefirm which amounted to Rs5500. Rs 500 will be recorded in which account and onwhich side.
(a) Realisation account credit side correct
(b) Realisation account debit side
(c) loan account debit side
(d) A’s capital account credit side.

Question.On dissolution of the firm amount received from sale of unrecorded asset is credited to :         
(a) partner’s capital account:
(b) profit and loss account 
(c) cash account
(d) realisation account

Question.Court may order dissolution of partnership firm     
(a) when a partner has become of unsound mind
(b) when a partner is permanently incapacitated 
(c) when a partner is found guilty of misconduct
(d) all of the above.

Question.At the time of firm’s dissolution credit balance of profit and loss account is credited to :               
(a) realisation account 
(b) partners capital account 
(c) cash account
(d) profit and loss account.

Question.On dissolution the balance of partners capital account appearing on the credit side of the balance sheet is transferred to :         
(a) debit side of realisation account 
(b) credit side of realisation account 
(c) debit side of partners capital account
(d) credit side of partners capital account.

Question.On dissolution of a firm in which ratio profit and loss on realisation is distributed among the partners:       
(a) capital ratio 
(b) profit sharing ratio
(c) equally 
(d) in the ratio of amount due to each partner.

Question: On firm’s dissolution, which one of the following account should be prepared at the last?
(a) Realisation Account
(b) Partner’s Capital Accounts
(c) Cash Account
(d) Partner’s Loan Account

Question: On dissolution of a firm, a partner paid Rs.700 for firm’s realisation expenses. Which account will be debited?
(a) Cash Account
(b) Realisation Account
(c) Capital Account of the Partner
(d) Profit & Loss A/c

Question:On taking responsibility of payment of realisation expenses by a partner, the account credited will be :
(a) Realisation Account
(b) Cash Account
(c) Capital Account of the Partnei
(d) None of the Above

Question:On dissolution of firm, loss calculate in realisation account is debited/credited to which account?
(a) Cash Account (Credit)
(b) Partners’ Capital Accounts (Debit)
(c) Partners’ Capital Accounts (Credit)
(d) Realisation Account (Debit)

Question:On dissolution of a firm, an unrecorded furniture of the value of Rs.5,000 was taken up by a partner for Rs.4,300. Which Account will be credited and by how much amount? :
(a) Cash Account by Rs.4,300
(b) Realisation Account by Rs.700
(c) Partner’s Capital Account by Rs.5,000
(d) Realisation Account by Rs.4,300

Question:On the basis of following data, final payment to a partner on firm’s dissolution will be made : Debit balance of Capital Account Rs. 14,000; Share of his profit on realisation Rs.43,000; Firm’s asset taken over by him for Rs. 17,000.
(a) Rs.31,000
(b) Rs.29,000
(c) Rs. 12,000
(d) Rs.60,000

Question:On payment of expenses of dissolution, account will be debited :
(a) Realisation Account
(b) Cash Account
(c) Profit & Loss Account
(d) None of the Above

Question:Investments valued Rs.2,00,000 were not shown in the books. One of the creditors took over these investments in full satisfaction of his debt of Rs.2,20,000. How much amount will be deducted from creditors?
(a) Rs.20,000
(b) Rs.2,20,000
(c) Rs.4,20,000
(d) Rs.2,00,000

Question:If creditors are Rs.25,000, capital is X 1,50,000 and cash balance is X 10,000, what will be the amount of sundry assets?
(a) Rs. 1,75,000
(b) X 1,85,000
(c) X 1,65,000
(d) X 1,40,000

Question:If opening capitals of partners are A Rs.3,00,000, B Rs.2,00,000 and C Rs.1,00,000 and their drawings during the year are A Rs. 50,000, B Rs.40,000 and C Rs. 30,000 and creditors are Rs.60,000, what will be the amount of assets of the firm?
(a) Rs.5,40,000
(b) Rs.4,20,000
(c) Rs.4,80,000
(d) Rs.6,60,000

Question:On dissolution of a firm, firm’s Balance Sheet total is Rs.77,000. On the assets side of the Balance Sheet items were shown preliminary expenses Rs.2,000; Profit & Loss Account (Debit) Balance Rs.4,000 and Cash Balance Rs. 1,800. Loss on realisation was Rs.6,300. Total assets (including cash balance) realised will be :
(a) Rs.69,200
(b) Rs.71,000
(c) Rs.64,700
(d) Rs.62,900

Question: Which of the following is effect of the retirement of a partner?
(a) share of remaining partners increases
(b) share of remaining partners remains same
(c) share of remaining partners decreases
(d) All of the options

Question: Only in Balance Sheet At the time of retirement of a partner, general reserve given in the balance sheet should be credited to all the partners (including outgoing partner) in their old profit sharing ratio.
(a) Credit side of Capital account of all the partners
(b) Debit side of Capital account of all the partners
(c) Both
(d) None of the options

Question:On dissolution of a firm, partners’ capital accounts balance was Rs.63,000; creditors balance was Rs. 12,000 and profit & loss account debit balance was Rs.6,000. Profit on realisation of assets was Rs.7,800. Total amount realised from assets was:
(a) Rs.81,000
(b) Rs.76,800
(c) Rs.70,800
(d) None

Question:On dissolution of a firm, a partner took-over the investments of Rs. 15,000 at Rs. 19,000. By how much amount the Realisation Account will be credited?
(a) Rs.4,000
(b) Rs. 19,000
(c) Nil
(d) Rs.23,000

Question:Anu, Bina and Charan are partners. The firm had given a loan of Rs. 20,000 to Bina. They decided to dissolve the firm. In the event of dissolution, the loan will be settled by
(a) transferring it to debit side of Realisation Account.
(b) transferring it to credit side of Realisation Account.
(c) transferring it to debit side of Bina’s Capital Account
(d) Bina paying Anu and Charan privately.

Question:Amount received from sale of unrecorded asset at the time of dissolution ofthe firm is credited to
(a) Partners’ Capital Accounts.
(b) Profit and Loss Account.
(c) Realisation Account.
(d) Cash Account.

Question: On dissolution, Goodwill Account is transferred to
(a) In the Capital Accounts of Partners.
(b) On the Credit of Cash Account.
(c) On the Debit of Realisation Account
(d) On the Credit of Realisation Account.

Question: At the time of dissolution of partnership firm, Deferred Revenue Expenditure (Advertisement Expenditure) is transferred to
(a) Capital Accounts of Partners.
(b) Realisation Account.
(c) Cash Account.
(d) Loan by Partner Account.

Question: Court can make an order to dissolve the firm when :
(a) Some partner has become fully mad
(b) Partnership deed is fully followed
(c) Continued future profits are expected
(d) Firm is running legal business

Question: On dissolution of a firm, realisation account is debited with
(a) All assets to be realised
(b) All outside liabilities of the firm
(c) Cash received on sale of assets
(d) Any asset taken over by one of the partners

Question: On dissolution of a firm, out of the proceeds received from the sale of assets ………… wiltjbe paid first of all
(a) Partner’s Capital
(b) Partner’s Loan to Firm
(c) Partner’s additional capital
(d) Outside Creditors

Question: On firm’s dissolution, on realisation of goodwill (which was shown in Balance Sheet) will be credited to :
(a) Cash A/c
(b) Realisation A/c
(c) Profit & Loss A/c
(d) None of the A/c

Question: On firm’s dissolution, when a partner voluntarily gives his personal asset to firms’ creditor as payment, the account credited will be :
(a) Realisation A/c
(b) Partner’s Capital A/c
(c) Cash A/c
(d) None of the A/c 

Question: Rohit, a partner is to carry out dissolution and he gets Rs. 50,000 as remuneration. Realisation Expenses were Rs. 25,000. Realisation Account will be debited with
(a) Rs. 50,000.
(b) Rs. 75,000.
(c) Rs. 25,000.
(d) Rs. 1,00,000.

Question: The firm paid realisation expenses of Rs. 10,000 on behalf of Nihar,a partner with whom it was agreed at Rs. 25,000. Realisation Expenses came to Rs. 35,000. Realisation Account will be debited by
(a) Rs. 10,000.
(b) Rs. 35,000.
(c) Rs. 25,000.
(d) Rs. 70,000.

 

Question: On the basis of following data, what final payment to a partner on firm’s dissolution will be made: Debit balance of Capital Account Rs. 14,000. Share of his profit on realisation Rs. 43,000; Firm’s asset taken by him for Rs. 17,000.
(a) Rs. 31,000
(b) Rs. 29,000
(c) Rs. 12,000
(d) Rs. 60,000

Question: On dissolution of a firm, its Balance Sheet revealed total creditors Rs.50,000; Total Capital Rs.48,000; Cash Balance Rs.3,000. Its assets were realised at 12% less. Loss on realisation will be :
(a) Rs.6,000
(b) Rs. 11,760
(c) Rs. 11,400
(d) Rs.3,600

Question: At the time of dissolution of firm, Loan given by partner to the firm is paid out ofthe amount realised on sale of assets
(a) after payment of outside liabilities but before repayment of capital.
(b) after payment of capital of partners.
(c) after payment of outside liabilities or capital.
(d) before payment of outside liabilities.

Question: At the time of dissolution of a firm, Debtors were Rs. 17,000 out of which Rs. 500 became bad and the rest realised 60%. Which account will be debited and by how much amount?
(a) Realisation Account by Rs. 16,500.
(b) Profit and Loss Account by Rs. 500.
(c) Cash Account by Rs. 9,900.
(d) Debtors Account by Rs. 7,100.

Question.Which of the following is paid first in case of dissolution of partnership firm?           
(a) Realisation expenses
(b) External liabilities
(c) Secured loan
(d) Partner’s loan

Question.In case of dissolution, total creditors of the firm were Rs40,000; creditors worth Rs10000 were given a piece of furniture costing Rs8000 in full and final settlement. Remaining creditors allowed a discount of 10%. What will be the the amount with which cash will be credited in the realisation account for payment to creditors:       
(a) 28,000
(b) 27,000correct.
(c) 20,000
(d) 25,000

Question.Realisation account is a :           
(a) personal account 
(b) real account 
(c) nominal account 
(d) none of the above.

Question.At the time of dissolution total assets are worth Rs3,00,000 and external liabilities are worth Rs1,20,000. If assets realised 120% and realisation expenses paid were Rs4,000, then profit/loss on realisation will be:         
(a) Profit Rs60,000
(b) Loss Rs60,000
(c) Loss Rs56,000
(d) Profit Rs56,000

Question.New ratio is not to be calculated on:           
(a) Admission of a partner
(b) retirement of a partner
(c) death of a partner
(d) dissolution of a partnership

Question.On dissolution of a firm Goodwill appearing in the balance sheet is transferred to:               
(a) capital account of partners 
(b) cash account
(c) debit side of realisation account 
(d) credit side of realisation account.

Question.AB and C are partners. The firm had given a loan of Rs20,000 to B. They decided to dissolve the firm. In the event of dissolution the loan will be settled by transferring it to the:         
(a) debit side of realisation account 
(b) transferring it to the credit side of realisation account 
(c) transfer it to the debit side of B’s capital account
(d) B paying A and C privately.

Question.At the time of dissolution of partnership an unrecorded asset taken by X a partner is debited to:       
(a) X capital account
(b) realisation account
(c) cash account
(d) none of the above

Question.In case of dissolution A one of the partner was paid only RS5000 for his loan to the firm which amounted to Rs5500. Rs 500 will be recorded in which account and on which side:       
(a) Realisation account credit side   correct
(b) Realisation account debit side 
(c) loan account debit side
(d) A’s capital account credit side.

Question.On firm’s dissolution which of the following account is prepared at the last?            
(a) Realisation account
(b) partners capital account
(c) cash account partners
(d) loan account

Question.Settlement of accounts in case of dissolution of partnership is dealt with which section of partnership act 1932?       
(a) Section 45 
(b) section 46
(c) section 47
(d) section 48 

Question.When realisation expenses are to be borne by a partner, actual realisation expense is credited to:           
(a) Partners capital a/c
(b) Cash a/c
(c) Realisation a/c
(d) None of the above

Question.In case of dissolution of partnership there was no workmen compensation fund and firm had to pay Rs3000 as compensation to workers where will be this Rs3000 recorded in the books of accounts?             
(a) debit side of realisation account
(b) credit side of realisation account
(c) debit side of partners capital account
(d) credit side of partners capital account.

Question. On dissolution of a firm, a partner paid Rs 700 for firm’s realization expenses. Which account will be debited?
(a) Cash account
(b) Realisation account
(c) Capital account of the partner
(d) Profit & Loss account. 

Question. On dissolution of a partnership firm, profit or loss on realization is distributed among the partners:
(a) In capital ratio
(b) In profit sharing ratio
(c) Equally
(d) None of the above   

Question. Identify the sequence of application of assets at the time of Dissolution of a Firm:
A. Partner’s Loans and Advances
B. Partner’s Capital
C. Profit among the Partners at their profit sharing Ratio
D. Third Parties such as Creditors and Bank Loan
Choose the correct option:
(a) D, C, B and A
(b) A, B, C and D
(c) D, B, C and A
(d) D, A, B and C     

Question. On dissolution of a firm, It’s Balance Sheet revealed total creditors Rs 50,000, total capital Rs 48,000, Cash balance Rs 3000, It’s assets were realized at 12% less. Loss on realization will be:
(a) Rs 6000
(b) Rs 11760
(c) Rs 11400
(d) Rs 3600     

Question. A Partner took over the Investments of Rs 15000 at Rs 19000 on dissolution of a Firm. What amount will be credited in Realisation Account?
(a) Rs 15000
(b) Rs 19000
(c) Rs 4000
(d) Rs 23000     

Question. Which o the following will be Transferred to Realisation Account?
A. Goodwill appearing in the books at the time of Dissolution of Firm
B. Investment Fluctuation Reserve
C. Provision for Doubtful Debts
D. General Reserve
Choose the Correct Option:
(a) D Only
(b) A, B, C Only
(c) Band C Only
(d) Aand C Only   

Question. In the event of dissolution of a partnership firm, the provision for doubtful debts is transferred to:
(a) RealiSation account
(b) Partner’s Capital Accounts
(c) Cash account
(d) Partner’s loan account     

Question. Unrecorded liability, when paid on dissolution of a firm is debited to:
(a) Profit & Loss account
(b) Realisationaccount
(c) Liabilities account
(d) No need to record   

Question. An unrecorded asset was valued ar Rs 100000.On Firm’s dissolution, it was sold for 52%.Realisation Account will be credited with
(a) Rs 48000
(b) Rs 100000
(c) Rs 52000     

Question. On Firm’s Dissolution, what entry will be Passed on realization of Goodwill which was shown in Balance sheet?
(a) Goodwill A/C—-Dr  –  To Realisation
(b) Cash A/C—–Dr  –  To Realisation
(c) Goodwill A/C—Dr  –  To Cash     

FILL IN THE BLANKS:

Question. All the accounts are settled among partners and creditors at the time of______________of a business. 

Question. Court may also dissolve a firm, if a partner ______________a suit, that one of thepartners is of___________ mind . 

Question.At the time of admission partnership firm is dissolved if business is _____________.   

Question.______________of partner will be paid off, before the settlement of partner’scapital. 

Question. Admission of a partner is termination of _____________and not a dissolution of____________ . 

Question. Partners are liable to settle the account of accounts payable even from their___________sources, if they are solvent.   personal  

Question. If all partners mutually decide for the dissolution, it will be dissolution of.     

Question.First of all____________ of the firms will be settled out of sources of the business.     liabilities

Question.All the accounts are settled among partners and creditors at the time of ______________of a business.   

Question.If all partners mutually decide for the dissolution, it will be dissolution of the__________ .   

Question.Admission of a partner is termination of _____________and not a dissolution of ____________ . 

Question.At the time of admission partnership firm is dissolved if business is _____________.   

Question.Court may also dissolve a firm, if a partner ______________a suit, that one of the partners is of___________ mind .    

Question.______________of partner will be paid off, before the settlement of partner’s capital.      

Question.First of all____________ of the firms will be settled out of sources of the business.   

Question.Partners are liable to settle the account of accounts payable even from their ___________sources, if they are solvent.  

Question.Match the following: