Introduction to Dissolution

Q.

Explain the process of dissolution of partnership firm.

Q.

Retirement and death of a partner is _________________.

1. None of these

2. dissolution of the partnership agreement

3. may or may not be a dissolution of partnership agreement

4. dissolution of a firm

Q.

On dissolution, how you deal with partner’s loan if it appears on the

(a) Assets side of the Balance Sheet.

(b) Liabilities side of the Balance Sheet.

Q.

A firm is unable to pay debts when ___________

1. A partner has debit balance

2. The firm is insolvent

3. None of these

4. A partner is insolvent

Q.

Dissolution of a firm is different from the dissolution of a partnership. True or False.

1. False

2. Can't say

3. None of these

4. True

Q. When the firm ceases its operations completely, it is called dissolution of the .

1. business
2. agreement
3. firm
4. partnership

Q. State whether the following statements are True or False.

At the time of dissolution of Partnership Firm all assets should be transferred to Realisation A/c.

Q.

The liability of partners are _______________.

1. Unlimited

2. Joint and several

3. Not deifned

4. None of these

Q. When the firm goes bankrupt, or it is ordered by a court to dissolve for illegal practices, it is called dissolution of the .

1. business
2. agreement
3. firm
4. partnership

Q. Bad debt amount should be credited to the _________ account.

1. Debtors
2. Bad debts
3. Sales
4. Creditors

Q. Which of the following statement is not true ______________________.

1. If del-credere commission is allowed , bad debt will be debited in consignment account.
2. If del-credere commission is allowed , bad debt will not be recorded in the books of consignor.
3. Del - credere commission is allowed by consignor to consignee.
4. Del -credere commission is generally relevant for credit sales.

Q.

When the firm ceases its operations completely, it is called _____________

1. dissolution of an agreement

2. dissolution of the firm

3. May or may not cause dissolution

4. None of these

Q. If del-credere commission is allowed for bad debt, consignee will debit the bad debt amount to:

1. Consignor A/c
2. Commission Earned A/c
3. Debtors A/c
4. General Profit & Loss A/c

Q. Dissolution of a partnership refers to any change in the existing agreement between the partners.

1. False
2. True

Q. There is no provision in the partnership deed regarding the duration of the partnership. This is _______.

1. partnership at will
2. partnership for an indefinite period
3. partnership by estoppel
4. partnership not recognised by law

Q. Where no provision is made by contract between the partner for duration of partnership or determination of their partnership is called ____________ .

1. Partnership for fix term
2. Partnership at will
3. None
4. Particular partnership

Q. Which of the following entry will be passed in the books of Consignor for recording bad debts if del-credere is allowed to Consignee?

A. Bad Debts A/c To Consignment Debtors A/c	Dr.
B. Bad Debts A/c To Profit & Loss A/c	Dr.
C. Bad Debts A/c To Consignee A/c	Dr.
D. No entry is required to be passed

1. A
2. B
3. C
4. D

Q.

When the firm goes bankrupt or it is ordered by a court to dissolve for illegal practices, it is called ______________

1. dissolution of an agreement

2. dissolution of the firm

3. May or may not cause dissolution

4. None of these

Q. Bad debts are regarded as _________ for a firm.

1. Loss
2. Expense
3. Profit
4. Income

Q. A limited liability partnership is a body corporate with legal personality.

1. Yes
2. No
3. Cant say
4. None of the above

Q. Select the most appropriate alternative from those given below :

Partnership is compulsorily dissolved when the partners of the firm become ____________
a) Solvent
b) Insolvent
c) Creditor
d) None of these

Q. A partnership at will is one:
1. Duration not fixed
2. Duration fixed
3. Dissolved at any time
4. Can be dissolved only on the happening of an event.

1. 1 & 2
2. 2 & 3
3. 3 & 4
4. 1 & 3

Q. A partnership for which no period or duration is fixed, under the Indian Partnership Act, 1932 is known as ________.

1. General partnership
2. Partnership at will
3. Particular partnership
4. Co-ownership

Q. The Existence of Bad Debts in trial balance signifies that the firm has already has incurred ________ arising from bad debts.

1. Income
2. Profit
3. Loss
4. Expense

Q. Dissolution of a firm is different from the dissolution of a partnership.

1. False
2. True

Q. Bad debts is ________ to business concern.

1. profit
2. loss
3. income
4. expense

Q. ________ is an amount the firm has not been able to realise firm its debtors.

1. Provisions
2. Depreciation
3. Bad debts
4. None

Q. A new agreement of a partnership firm in replace the old one is formed only in these conditions.

1. Admission of new partner
2. Death of a partner
3. Change in profit sharing
4. All the above

Q. Write Short answers for the following:
How is membership of a shareholder terminated?

Q. Bad debts after preparing trial balance are _______ from debtors.

1. Deducted
2. Added
3. No effect
4. None