Question : There was a contingent liability of Rs. 37,000 in respect of bills discounted but not matured. All the discounted bills were honoured but an acceptor of a bill of Rs. 5,000 became insolvent and fifty paise in a rupee was received. The liability of the firm on account of this bill discounted and dishonoured has not so far been recorded. The entry will be .
Option 1: Realization account debited Rs 5,000 and credited bank account Rs 5,000
Option 2: Bank account debited with Rs 2,500 and credited realization account Rs 2,500
Option 3: Both 1 and 2
Option 4: None of these
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
When BIR was discounted and dishonoured, Hence the bill had to be met by the firm. Realisation AIC Dr. 5,000 To Bank AC. 5000 [for the Payment of Bill] Bank A/C Dr. 2500 To Realisation. A/c. 2500 [for 50% Received from his Estate] Hence, the correct option is 3.
Question : Half of the Trade Creditors valued Rs 40,000 accepted Plant and Machinery at 10% less than the book value and Cash of Rs. 5,000 in full settlement of their claims. The remaining Trade Creditors were paid at a discount of 10%. The entry will be
Option 1: Realization account debited and Bank account credited by Rs 5,000
Option 2: Realization account debited and Bank account credited by Rs 36,000
Option 3: Realization account debited and Bank account credited by Rs 41,000
Option 4: Realization account debited and Bank account credited by Rs 80,000
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
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: A bill receivable of Rs. 3,000 under discount was dishonoured as the acceptor had become insolvent and hence the bill had to be met by the firm. The Journal entry will be
Option 1: Bill receivable account debited and bank account credited Rs 3,000
Option 2: Realisation account debited Rs 3,000 and credited B/R account Rs 3,000
Option 3: Realisation account debited Rs 3,000 and credited bank account Rs 3,000
Option 4: None of the above
Question : A debtor of Rs 31,000 agreed to pay the dissolution expenses which were Rs 30,000 in full settlement of his debt. Choose the correct option.
Option 1: debited cash account Rs 31,000 and credited realization account Rs 31,000
Option 2: debited realization account rs 30,000 and credited bank account rs 30,000
Option 3: No entry required
Option 4: debited cash account Rs 1000 and credited realization account Rs 1000
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