Question : When a Creditor takes over an asset whose value is less than the amount due to him in full settlement of his claim, what entry shall be passed?

Option 1: Debited realization account

Option 2: Credited realization account

Option 3: Credited bank account

Option 4: No entry required

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 : 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

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

Question : Book Value of assets (other than cash and bank) transferred to Realisation Account is Rs. 1,00,000. 50% of the assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of 30% on cost; 5% of the balance being obsolete, realised nothing and remaining assets are handed over to a Creditor, in full settlement of his claim. The entry will be

Option 1: Debited bank account Rs 52,000 and debited partner's capital account with Rs 40,000 credited realization account Rs 92,000

Option 2: Debited bank account Rs 40,000 and partners capital account Rs 52,000 credited realization account Rs 92,000

Option 3: Debited bank account Rs 50,000 and partner's capital account with Rs 50,000 credited realization account Rs 1,00,000

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.