On dissolution of partnership, the realisation account is debited with :

All the liabilities of the firm

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Cash received from the sale of assets

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All assets to be realised

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Any asset taken over by one of the partners.

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Solution

The correct option is C
All assets to be realised

On dissolution of partnership, the realisation account is debited with all assets to be realised.

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Q. A, B and C were in partnership sharing profits and losses in the ratio of 2 : 1 : 1. They decided to dissolve the partnership. On that date of dissolution, Sundry Assets (including cash ₹ 5,000) amounted to ₹ 88,000, assets realised ₹ 80,000 (including an unrecorded asset which realised ₹ 4,000). A contingent liability on account of bills discounted ₹ 8,000 was paid by the firm. The Capital Accounts of A, B and C showed a balance of ₹ 20,000 each.
Prepare Realisation Account, Partners' Capital Accounts and Cash Account.

Give the necessary journal entries in each of the following alternative cases :

(i) Realisation expenses amounted to Rs. 500.

(ii) Realisation expenses paid by the firm amounted to Rs. 500 and the partner has to bear the realisation expenses.

(iii) 'A' one of the partners was to bear all the realisation expenses for which he was given a commission of 2% of net cash realised from dissolution. Cash realised from assets was Rs 25,000 and cash paid for liabilities amounted to Rs 5,000

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

___________________ account is prepared to find out the net effect of realisation on various assets and payment of various liabilities in case of dissolution of firm.

Q. After realisation of all assets and paying off liabilities, the partners share the remaining cash & bank balances according to the partners' balance.

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On dissolution of partnership, the realisation account is debited with :

The correct option is C All assets to be realised On dissolution of partnership, the realisation account is debited with all assets to be realised.

The correct option is C
All assets to be realised

On dissolution of partnership, the realisation account is debited with all assets to be realised.