Question : On dissolution of a firm, realisation account is debited with :
Option 1: All outside liabilities of the firm
Option 2: All assets to be realised
Option 3: Any asset taken over by one of the partners
Option 4: Cash received on sale of assets
Correct Answer: All assets to be realised
Solution : When assets are sold cash/bank A/c is debited and Realization A/c credited. On settling the liabilities Realization A/c is debited and Cash/Bank A/c is credited. In last if total of credit side exceeds debit side, it means there is profit and that is transferred to partner's capital accounts.
Hence the Correct answer is option 2
Question : On dissolution of a firm, the realization account is credited with
Option 1: when liabilities are paid
Option 2: when assets are transferred
Option 3: when liabilities paid by any partner
Option 4: when cash received from the sale of assets
Question : On dissolution of a partnership firm, the amount received from the sale of assets is debited to
Option 1: Realization account
Option 2: Cash account
Option 3: Partner's capital account
Option 4: None of the above
Question : At the time of dissolution of the partnership firm, fictitious assets are transferred to :
Option 1: Capital Accounts of Partners
Option 2: Realisation Account
Option 3: Cash Account
Option 4: Partners' Loan Account
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