Vidaara.orgClass 12 · Mathematics
CodeVID-M12-WS
Dissolution of a Partnership Firm — Practice Worksheet
Name: ____________________
Roll No.: __________
Date: ____________
General Instructions
- All questions are compulsory.
- Choose the correct option (A, B, C or D) for each question.
- The answer key is at the end — try the paper first!
Section A — Multiple Choice (1 mark each)
15 × 1 = 15 marks
1.
Dissolution of the FIRM means the business is:
- A.Continued
- B.Closed down completely
- C.Admitted
- D.Reconstituted
2.
Admission and retirement are examples of dissolution of:
- A.The firm
- B.Partnership (relationship)
- C.The court
- D.Cash
3.
In a partnership at will, a firm may be dissolved by:
- A.Notice by a partner
- B.Only a court
- C.Only death
- D.Never
4.
The account opened on dissolution of the firm is the:
- A.Revaluation A/c
- B.Realisation A/c
- C.Appropriation A/c
- D.Current A/c
5.
Which is NOT transferred to the Realisation Account?
- A.Machinery
- B.Debtors
- C.Cash/Bank
- D.Creditors
6.
Assets are transferred to the Realisation Account at:
- A.Market value
- B.Book value
- C.Realised value
- D.Zero
7.
Outside liabilities are transferred to the ____ of the Realisation Account.
- A.Debit side
- B.Credit side
- C.Both sides
- D.Neither
8.
Machinery (book 50,000) sold for 60,000 is recorded by:
- A.Cash A/c Dr 60,000; To Realisation A/c 60,000
- B.Realisation A/c Dr 60,000
- C.Cash A/c Dr 50,000
- D.No entry
9.
If a partner takes over an asset, his capital is ____ and Realisation credited.
- A.Credited
- B.Debited
- C.Ignored
- D.Doubled
10.
Profit or loss on realisation is shared in the:
- A.Capital ratio
- B.Profit-sharing ratio
- C.Gaining ratio
- D.Equal ratio
11.
Under Section 48, payment is made FIRST to:
- A.Partners' capital
- B.Outside liabilities
- C.Surplus to partners
- D.Partner's loan
12.
A partner's loan is paid:
- A.Before outside creditors
- B.After outside creditors but before capital
- C.After capital
- D.Last of all
13.
Realisation expenses are recorded by debiting:
- A.Cash A/c
- B.Realisation A/c
- C.Capital A/c
- D.Reserve
14.
Accumulated reserves on dissolution are transferred to:
- A.Realisation A/c
- B.Partners' capitals directly (in PSR)
- C.Cash A/c
- D.Creditors
15.
When fully wound up, the Realisation, Cash and Capital accounts all close to:
- A.A profit
- B.Nil
- C.A loss
- D.A loan
Section B — Challenge / Olympiad (2 marks each)
10 × 2 = 20 marks
16.
Why is the Realisation Account fundamentally different from the Revaluation Account?
- A.Realisation closes all assets/liabilities on dissolution; Revaluation only restates values during reconstitution
- B.They are identical
- C.Revaluation is used on dissolution
- D.Realisation only revalues
17.
Sundry assets (book Rs 4,00,000) realise Rs 3,50,000; creditors Rs 1,00,000 are paid at Rs 95,000; expenses Rs 5,000. The realisation result is:
- A.Loss of Rs 50,000
- B.Profit of Rs 50,000
- C.Loss of Rs 60,000
- D.Profit of Rs 5,000
18.
A creditor of Rs 40,000 accepts a machine (book Rs 35,000) in full settlement. The entry is:
- A.No cash entry — the asset and liability cancel within Realisation
- B.Cash A/c Dr 40,000
- C.Realisation A/c Dr 40,000; To Cash
- D.Capital A/c Dr 35,000
19.
Order of payment under Section 48: which sequence is correct?
- A.Outside liabilities → partner's loan → partners' capital → surplus in PSR
- B.Capital → loan → creditors
- C.Surplus → creditors → capital
- D.Loan → capital → creditors
20.
A is to bear all realisation expenses of Rs 4,000 personally but the firm pays them. The entry is:
- A.A's Capital A/c Dr 4,000; To Cash/Bank A/c 4,000
- B.Realisation A/c Dr 4,000
- C.Cash A/c Dr 4,000
- D.No entry
21.
After all entries, B's capital shows a debit balance of Rs 12,000 and B is solvent. B must:
- A.Bring in Rs 12,000 cash
- B.Receive Rs 12,000
- C.Do nothing
- D.Take over an asset
22.
Cash/Bank is NOT transferred to the Realisation Account because it is:
- A.The medium used to make and receive payments
- B.Not an asset
- C.A liability
- D.Always nil
23.
An unrecorded asset of Rs 7,000 is sold for Rs 6,000 on dissolution. The realisation entry credits Realisation with:
- A.Rs 6,000 (the cash actually received)
- B.Rs 7,000
- C.Rs 13,000
- D.Nil
24.
A partner's loan to the firm is shown:
- A.Separately and paid after creditors but before capital — not via Realisation
- B.In the Realisation Account as a liability
- C.As capital
- D.As an asset
25.
If realisation yields a large profit, the partners' capital accounts will, other things equal, end with:
- A.Larger credit balances payable to them
- B.Debit balances
- C.Nil before any payment
- D.No change
Answer Key
Section A — Multiple Choice (1 mark each)
- (B) Closed down completely
- (B) Partnership (relationship)
- (A) Notice by a partner
- (B) Realisation A/c
- (C) Cash/Bank
- (B) Book value
- (B) Credit side
- (A) Cash A/c Dr 60,000; To Realisation A/c 60,000
- (B) Debited
- (B) Profit-sharing ratio
- (B) Outside liabilities
- (B) After outside creditors but before capital
- (B) Realisation A/c
- (B) Partners' capitals directly (in PSR)
- (B) Nil
Section B — Challenge / Olympiad (2 marks each)
- (A) Realisation closes all assets/liabilities on dissolution; Revaluation only restates values during reconstitution
- (A) Loss of Rs 50,000
- (A) No cash entry — the asset and liability cancel within Realisation
- (A) Outside liabilities → partner's loan → partners' capital → surplus in PSR
- (A) A's Capital A/c Dr 4,000; To Cash/Bank A/c 4,000
- (A) Bring in Rs 12,000 cash
- (A) The medium used to make and receive payments
- (A) Rs 6,000 (the cash actually received)
- (A) Separately and paid after creditors but before capital — not via Realisation
- (A) Larger credit balances payable to them
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