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Realisation of Assets (Dissolution)

At the time o...

Question

At the time of dissolution of the firm, loan from partner is _________ .

A

Transferred to Realisation Account

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B

Not transferred to Realisation Account

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C

Transferred to the Partner's Capital Account

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D

None of these

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Solution

The correct option is B Not transferred to Realisation Account
not transferred to Realisation Account.
Realisation account is opened on the dissolution of a firm. It is prepared by -
1. Transferring all assets except cash or bank account to the debit side of the account.
2. Transferring all liabilities except partner's loan account and partner's capital account to the credit side of the account.
3. Amount realised on sale of assets is credited to the account.
4. Liabilities paid are debited to the account.
5. Expenses incurred on the firm on dissolution are debited.

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Similar questions

Is the loan by a partner transferred to Realisation Account at the time of dissolution of a partnership firm? Why?

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

At the time of dissolution loan from partner will be transferred to Realisation Account.

At the time of dissolution, all the assets of the firm are transferred to Realisation Account at ___________ values.

Q. _______________ assets are transferred to Realisation A/c.

Q. Pass necessary Journal entries on the dissolution of a firm in the following cases:
(a) Dharam, a partner, was appointed to look after the process of dissolution at a remuneration of ₹ 12,000 and he had to bear the dissolution expenses. Dissolution expenses ₹ 11,000 were paid by Dharam.
(b) Jay, a partner, was appointed to look after the process of dissolution and was allowed a remuneration of ₹ 15,000. Jay agreed to bear dissolution expenses. Actual dissolution expenses ₹ 16,000 were paid by Vijay, another partner on behalf of Jay.
(c) Deepa, a partner, was to look after the process of dissolution and for this work she was allowed a remuneration of ₹ 7,000. Deepa agreed to bear dissolution expenses. Actual dissolution expenses ₹ 6,000 were paid from the firm's bank account.
(d) Dev, a partner, agreed to do the work of dissolution for ₹ 7,500. He took away stock of the same amount as his commission. The stock had already been transferred to Realisation Account.
(e) Jeev, a partner, agreed to do the work of dissolution for which he was allowed a commission of ₹ 10,000. He agreed to bear the dissolution expenses. Actual dissolution expenses paid by Jeev were ₹ 12,000. These expenses were paid by Jeev by drawing cash from the firm.
(f) A debtor of ₹ 8,000 already transferred to Realisation Account agreed to pay the realisation expenses of ₹ 7,800 in full settlement of his account.

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Realisation of Assets (Dissolution)

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