CameraIcon

SearchIcon

MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Final Settlement with Partner (Dissolution)

The payment o...

Question

The payment of loans due to partners is done by debiting A/c and crediting A/c.

A

Bank, Fictitious Asset

No worries! We‘ve got your back. Try BYJU‘S free classes today!

B

Fictitious Asset, Bank

No worries! We‘ve got your back. Try BYJU‘S free classes today!

C

Partner's Loan, Bank

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

D

Bank, Partner's Loan

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Partner's Loan, Bank
Partner's Loan A/c is debited while Bank A/c is credited for payment of loans due to partners. A loan is not part of the partner's capital, and the loan is treated in the same way as a loan from a third party. The liability of partnership will be recorded by the creation of a liability, resulting in a credit balance for the amount of the loan.

Suggest Corrections

thumbs-up

0

Similar questions

Q. If a loan from a partner appears on the liabilities side of the Balance Sheet of the firm and the Capital Account of such partner shows a debit balance, how is loan dealt with?

Q. A and B are partners in a firm sharing profits in the ration

3 : 2

. Mrs. A has given a loan of Rs. 20,000 to the firm and the firm also obtained a loan of Rs. 10,000 from B. The firm was dissolved and its assets were realised for Rs.25,000. State the order of payment of Mrs. A's loan and B's loan with reason, if there were no creditors of the firm.

Q. All the partners want to dissolve the firm. Y, a partner, demands that his loan of Rs. 2,00,000 be paid before payment of capitals of the partners. But X, another partner demands that capitals be paid before payment of Y's loans. Who is correct?

Q. A introduces B to C as a partner in his business. B, in fact, was not a partner but he did not deny the statement. C advanced a loan to A. A could not repay the loan. C can hold B responsible for the repayment of loan because _________________.

Q. Does the loan from an outsider have priority over the loan from a partner as to repayment?

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Let’s Settle

ACCOUNTANCY

Watch in App

explore_more_icon

Explore more

Final Settlement with Partner (Dissolution)

Standard XII Accountancy

Join BYJU'S Learning Program

CrossIcon