Question : Realization expenses were to be borne by A for which he is to get a credit of Rs. 10,000. Actual realization expenses paid out of the firm Bank Account amounted to Rs. 12,000. Choose the correct Journal entry for the treatment of realization expenses.
Option 1: Realization account debit Rs 12,000 and credited Bank account Rs 12,000
Option 2: Debited realization account and credited partners capital account with Rs 12,000
Option 3: Debited A's capital account Rs 12,000 and credited bank account Rs 12,000
Option 4: None of these
Correct Answer: Debited A's capital account Rs 12,000 and credited bank account Rs 12,000
Solution : Answer = Debited A's capital account Rs 12,000 and credited bank account Rs 12,000.
When Partner agrees to Bear Realisation Expenses But Exp. were to Be paid by the firm, on the Behalf of Partner. Then the following Journal Entry will Be made. Partners capital A/c Dr. 12000 To Bank - 12000 Hence, the correct option is 3.
Question : Jeev, a partner, agreed to do the work of dissolution for which he was allowed a commission of Rs. 10,000. He agreed to bear the dissolution expenses. Actual dissolution expenses paid by Jeev were Rs. 12,000.These expenses were paid by Jeev by drawing cash from the firm. The entry will be
Option 1: Partners capital account Debited and credited realisation account Rs 12,000
Option 2: Debited partners' capital account and credited bank account with Rs 12,000
Option 3: Realiation account debited with Rs 2000 and credited bank account with Rs 2000
Option 4: none of the above
Question : Mohan and Kanwar are partners in a firm. Their firm was dissolved on 1.1.2013. Mohan was assigned the work of dissolution. For this work Mohan was to be paid Rs.500. Mohan paid dissolution expenses of Rs.400 from his own pocket. Choose the correct Journal entry
Option 1: Debited realization account by Rs 400 and credited bank account Rs 400
Option 2: Debited realization account by Rs 900 and credited mohan's capital account Rs 900
Option 3: Debited realization account Rs 500 credited Moahn's capital acccout Rs 400 and bank account Rs 100
Option 4: None of the above
Question : Goodwill of Rs. 75,000 and prepaid fire insurance of Rs. 10,000. (already transferred to realization account) What entry will be passed at the time of realization of assets?
Option 1: Bank account debited and credited realization account.
Option 2: Debited realization account and credited bank account.
Option 3: No Journal entry required.
Option 4: None of the above.
Question : Adiraj and Karan were partners in a firm sharing profits and losses in the ratio 3: 2. On 31st March 2018 the firm was dissolved. After the transfer of assets (other than cash in hand and at the bank) and third-party liabilities to the Realization Account, the following information was provided: Question: Realisation expenses amounted to Rs. 2,000 which were paid by Adiraj.
Option 1: Realization account debited Rs 2,000, credited bank account Rs 2,000
Option 2: Debited partner's capital account Rs 2,000 and credited bank account Rs 2,000
Option 3: Realization account debited Rs 2,000, credited partner's capital Rs 2,000
Question : Realization expenses of Rs. 5,000 were to be borne by Pavit, a partner. However, it was paid by Hitesh, another partner. It was to be recorded in the books. The entry will be
Option 1: Debited realisation account Rs 5,000, credited Pavit's capital account Rs 5,000
Option 2: Debited realisation account Rs 5,000, credited Bank account Rs 5,000
Option 3: Debited realisation account Rs 5,000 and credited Hitesh's capital account Rs 5,000
Option 4: Debited Pavit's capital account and credited Hitesh's capital account Rs 5,000
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