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Accounting for Redemption of Debentures

If any unreco...

Question

If any unrecorded liability is paid on dissolution of the firm __________ is debited.

A

Cash / Bank Account

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B

Realization Account

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C

Partners Capital Account

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D

Partners Loan Account

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Solution

The correct option is A Realization Account
In case of payment of unrecorded liability Realisation account would be debited and Cash/bank a/c credited.

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

If any unrecorded liability is paid on dissolution of the firm____________ account is debited.
a) Cash/Bank A/c
b) Realisation A/c
c) Partner’s Capital A/c
d) Loan A/c

Unrecorded Liability, when paid on the dissolution of a firm, is debited to -

Q. K and A are partners in a firm. They share profits and losses in the ratio of 4:1. They decide to dissolve the firm. K Capital - Rs. 1,60,000, A Capital - Rs. 1,00,000, Total assets - Rs. 3,95,000, Total liabilities - Rs. 1,35,000. On dissolution assets realized Rs. 3,50,000 & liabilities including unrecorded liability settled at Rs. 1,50,000. Net profit or loss on realization = ?

Q. K and A are partners in a firm. They share profits and losses in the ratio of

4 : 1

. They decide to dissolve the firm. K capital - Rs

1, 60, 000

, A Capital - Rs

1, 00, 000

, Total assets - Rs

3, 95, 000

, Total liabilities - Rs

1, 35, 000

. On dissolution assets realized Rs

3, 50, 000

& liabilities including unrecorded liability settled at Rs

1, 50, 000

. What will be Net profit or loss on realization ?

Q. On the dissolution of a firm, if a partner has a debit balance in his capital account then:

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