MCQ Chapter 5 Dissolution of Partnership Firm Class 12 Accountancy

Please refer to Dissolution of Partnership Firm MCQ Questions Class 12 Accountancy below. These MCQ questions for Class 12 Accountancy with answers have been designed as per the latest NCERT, CBSE books and syllabus issued for the current academic year. These objective questions for Dissolution of Partnership Firm will help you to prepare for the exams and get more marks.

Dissolution of Partnership Firm MCQ Questions Class 12 Accountancy

Please see solved MCQ Questions for Dissolution of Partnership Firm in Class 12 Accountancy. All questions and answers have been prepared by expert faculty of standard 12 based on latest examination guidelines.

MCQ Questions Class 12 Accountancy Dissolution of Partnership Firm

Question: Nature of realisation Account :-
(a) Nominal Account
(b) Real Account
(c) Personal Account 

Question: Court may pass order of the dissolution of the firm where :-
(a) Expiry of the term for which the firm was constituted
(b) When the business of the firm can’t be carried on except at a loss
(c) On completion of the venture

Question:Section 48 of the Indian partnership act 1932 deals with :-
(a) Payment of firms debts and privatedebts
(b) Settlement of account when the firm is dissolved
(c) Dissolution of the firm 

Question: Dissolution of the Partnership firm means :-
(a) Change in existing ratio of partners
(b) Dissolution of Partnership among all partners
(c) Death of a Partner
(d) Dissolution of firm

Question: Liabilities to third parties in case of dissolution of partnership firm do not include : –
(a) Reserves
(b) Credit Balance of P&L Account
(c) Partners loan
(d) All of the Above.

Question: When Realisation expenses are borne& paid by the same partner :-
(a) No entry will be passed
(b) Realisation Account will be debited ,CashAccount will be credited
(c) None of above

Question: Liability which is not shown in balance sheet but paid at the time of dissolution :-
(a) Outstanding Expenses
(b) Bills payable
(c) Unrecorded liability

Question: Partners loan Account is not transferred to :-
(a) Bank Account
(b) Realisation Account
(c) Partners loan Account

Question: Third party liabilities are shown in Realisation Account :-
(a) Debits side of Realisation Account
(b) Credit side of Realisation Account
(c) Debit side of Partner Capital Account
(d) Credit side of Partner CapitalAccount

Question: Accumulated Profit /Loss are transferred to Partner’s Capital Account in case of dissolution in their
(a) New Ratio
(b) Gaining Ratio
(c) Profit Sharing Ratio
(d) None of the above

Question: Nature of bank Account is :-
(a) Artificial Personal Account
(b) Natural Personal Account
(c) Representative Personal Account

Question: Dissolution of the Partnership does not include :-
(a) Admission of a partner
(b) Death of a partner
(c) Change in Profit-Sharing Ratio
(d) Dissolution of firm

Question: Partners Loan Account is :-
(a) Personal Account
(b) Real Account
(c) Nominal Account

Question: On dissolution advertisement suspense appearing in balance sheet is shown in :-
(a) RealisationAccount
(b) Partner’s Capital Account
(c) Bank Account
(d) Revaluation Account

Question: On dissolution of partnership firm the personal debt of a partner will be paid out of :-
(a) Partners personal asset
(b) Firm profit
(c) Both (a) and (b)
(d) All of the above

Question: If a partner has taken some of the Sundry Asset at Rs. 7,200 ( being 10% less than book value ) its book value is :-
(a) Rs. 7,920
(b) Rs. 8,000
(c) Rs. 7,200
(d) Rs. 7,000

Question: On Dissolution goodwill Account is transferred to :-
(a) Credit side of Bank Account
(b) Debit side of Partners Capital Account
(c) Debit side of Realisation Account
(d) Credit side of Realisation Account

Question: If WCR was not given in balance sheet & liability arises of Rs. 10,000, the Journal Entry will be :-
(a) WCR A/cDr., To Partner Capital A/c
(b) Realisation A/c Dr., To Bank A/c
(c) Bank A/c Dr., To RealisationA/c
(d) No Entry

Question: If a partner undertakes to pay the liability of a firm on dissolution it will be recorded as :-
(a) RealisationA/c Dr., To Bank/CashA/c
(b) RealisationA/c Dr., To Partners Capital A/c
(c) Bank/Cash Dr., To Partners Capital A/c
(d) None of the above

Question: Change in existing agreement between Partners is called :-
(a) Dissolution of Partnership
(b) Dissolution of Partnership Firm
(c) Admission of a Partner
(d) Death of a Partner 

Question: Which of the following is effect of the retirement of a partner?
(a) share of remaining partners increases
(b) share of remaining partners remains same
(c) share of remaining partners decreases
(d) All of the options

Question: Only in Balance Sheet At the time of retirement of a partner, general reserve given in the balance sheet should be credited to all the partners (including outgoing partner) in their old profit sharing ratio.
(a) Debit side of Capital account of all the partners
(b) Credit side of Capital account of all the partners
(c) Both
(d) None of the options 

Question: Which of the following is prepared at the time of retirement of a partner?    work sheet mai
(a) Revaluation Account
(b) Profit and Loss Suspense Account
(c) Both
(d) None of the options

Question: Which of the following item is not shown in the credit side of deceased partners capital account?
(a) Share of loss
(b) Share of profit
(c) Revaluation profit
(d) All of the options

Question: Bad debts recovered will be recorded in:
(a) Cr. Side of revaluation account
(b) Dr. Side of revaluation account
(c) Both
(d) None of the options 

Question: On firm’s dissolution, which one of the following account should be prepared at the last?
(a) Realisation Account
(b) Partner’s Capital Accounts
(c) Cash Account
(d) Partner’s Loan Account

Question: On dissolution of a firm, a partner paid Rs.700 for firm’s realisation expenses. Which account will be debited?
(a) Cash Account
(b) Realisation Account
(c) Capital Account of the Partner
(d) Profit & Loss A/c 

Question: On taking responsibility of payment of realisation expenses by a partner, the account credited will be :
(a) Realisation Account
(b) Cash Account
(c) Capital Account of the Partnei
(d) None of the Above

Question: On dissolution of firm, loss calculate in realisation account is debited/credited to which account?
(a) Cash Account (Credit)
(b) Partners’ Capital Accounts (Debit)
(c) Partners’ Capital Accounts (Credit)
(d) Realisation Account (Debit)

Question: On dissolution of a firm, an unrecorded furniture of the value of Rs.5,000 was taken up by a partner for Rs.4,300. Which Account will be credited and by how much amount? :
(a) Cash Account by Rs.4,300
(b) Realisation Account by Rs.700
(c) Partner’s Capital Account by Rs.5,000
(d) Realisation Account by Rs.4,300

Question: On the basis of following data, final payment to a partner on firm’s dissolution will be made : Debit balance of Capital Account Rs. 14,000; Share of his profit on realisation Rs.43,000; Firm’s asset taken over by him for Rs. 17,000.
(a) Rs.31,000
(b) Rs.29,000
(c) Rs. 12,000
(d) Rs.60,000

Question: At the time of dissolution of firm, “Loan of partners” (Loans given by partners to the firm) is paid out of the amount realised on sale of assets :
(a) After making the payment of balance of Capital Accounts of partners
(b) After making the payment of above (a) and (b)
(c) Before the payment of loans given by third party
(d) After making the payment of loans given by third party

Question: At the time of dissolution of firm, at which stage the balance of partner’s capital accounts is paid?
(a) After making the payment to third party’s loans
(b) Before making the payment of partners in respect of their loans
(c) After making the payment to third party for their loans as well as partners loans
(d) None of the above.

Question: If creditors are Rs.25,000, capital is X 1,50,000 and cash balance is X 10,000, what will be the amount of sundry assets?
(a) Rs. 1,75,000
(b) X 1,85,000
(c) X 1,65,000
(d) X 1,40,000

Question: If opening capitals of partners are A Rs.3,00,000, B Rs.2,00,000 and C Rs.1,00,000 and their drawings during the year are A Rs. 50,000, B Rs.40,000 and C Rs. 30,000 and creditors are Rs.60,000, what will be the amount of assets of the firm?
(a) Rs.5,40,000
(b) Rs.4,20,000
(c) Rs.4,80,000
(d) Rs.6,60,000

Question: On dissolution of a firm, firm’s Balance Sheet total is Rs.77,000. On the assets side of the Balance Sheet items were shown preliminary expenses Rs.2,000; Profit & Loss Account (Debit) Balance Rs.4,000 and Cash Balance Rs. 1,800. Loss on realisation was Rs.6,300. Total assets (including cash balance) realised will be :
(a) Rs.69,200
(b) Rs.71,000
(c) Rs.64,700
(d) Rs.62,900

Question: On dissolution of a firm, a partner took-over the investments of Rs. 15,000 at Rs. 19,000. By how much amount the Realisation Account will be credited?
(a) Rs.4,000
(b) Rs. 19,000
(c) Nil
(d) Rs.23,000

Question: On payment of expenses of dissolution, account will be debited :
(a) Realisation Account
(b) Cash Account
(c) Profit & Loss Account
(d) None of the Above

Question: Investments valued Rs.2,00,000 were not shown in the books. One of the creditors took over these investments in full satisfaction of his debt of Rs.2,20,000. How much amount will be deducted from creditors?
(a) Rs.20,000
(b) Rs.2,20,000
(c) Rs.4,20,000
(d) Rs.2,00,000

Question: On dissolution of a firm, partners’ capital accounts balance was Rs.63,000; creditors balance was Rs. 12,000 and profit & loss account debit balance was Rs.6,000. Profit on realisation of assets was Rs.7,800. Total amount realised from assets was:
(a) Rs.81,000
(b) Rs.76,800
(c) Rs.70,800
(d) None 

Question: The firm paid Reali sation expenses of Rs. 10,000 on behalf of Nihar,a partner with whom it was agreed at Rs. 25,000. Real isation Expenses came to Rs. 35,000. Reali sation Account will be debited by
(a) Rs. 10,000.
(b) Rs. 35,000.
(c) Rs. 25,000.
(d) Rs. 70,000. 

Question: On dissolution, Goodwill Account is transferred to
(a) In the Capital Accounts of Partners.
(b) On the Credit of Cash Account.
(c) On the Debit of Realisation Account
(d) On the Credit of Realisation Account.

Question: At the time of dissolution of partnership firm, Deferred Revenue Expenditure (Advertisement Expenditure) is transferred to
(a) Capital Accounts of Partners.
(b) Realisation Account.
(c) Cash Account.
(d) Loan by Partner Account.

Question: Court can make an order to dissolve the firm when :
(a) Some partner has become fully mad
(b) Partnership deed is fully followed
(c) Continued future profits are expected
(d) Firm is running legal business

Question: Amount received from sale of unrecorded asset at the time of dissolution ofthe firm is credited to
(a) Partners’ Capital Accounts.
(b) Profit and Loss Account.
(c) Realisation Account.
(d) Cash Account.

Question: Anu, Bina and Charan are partners. The firm had given a loan of Rs. 20,000 to Bina. They decided to dissolve the firm. In the event of dissolution, the loan will be settled by
(a) transferring it to debit side of Realisation Account.
(b) transferring it to credit side of Realisation Account.
(c) transferring it to debit side of Bina’s Capital Account.
(d) Bina paying Anu and Charan privately.

Question: On dissolution of a firm, realisation account is debited with
(a) All assets to be realised
(b) All outside liabilities of the firm
(c) Cash received on sale of assets
(d) Any asset taken over by one of the partners 

Question: On firm’s dissolution, when a partner voluntarily gives his personal asset to firms’ creditor as payment, the account credited will be :
(a) Realisation A/c
(b) Partner’s Capital A/c
(c) Cash A/c
(d) None of the A/c

Question: Which of the following is not the mode of dissolution of the firm?
(a) By Mutual Agreement
(b) On happening of an event
(c) Dissolution by court
(d) Retirement of a partner

Question: At the time of dissolution of firm, Loan given by partner to the firm is paid out ofthe amount realised on sale of assets
(a) after payment of outside liabilities but before repayment of capital.
(b) after payment of capital of partners.
(c) after payment of outside liabilities or capital.
(d) before payment of outside liabilities.

Question: Rohit, a partner is to carry out dissolution and he gets Rs. 50,000 as remuneration. Realisation Expenses were Rs. 25,000. Realisation Account will be debited with
(a) Rs. 50,000.
(b) Rs. 75,000.
(c) Rs. 25,000.
(d) Rs. 1,00,000.

Question: On the basis of following data, what final payment to a partner on firm’s dissolution will be made: Debit balance of Capital Account Rs. 14,000. Share of his profit on realisation Rs. 43,000; Firm’s asset taken by him for Rs. 17,000.
(a) Rs. 31,000
(b) Rs. 29,000
(c) Rs. 12,000
(d) Rs. 60,000

Question: On firm’s dissolution, on realisation of goodwill (which was shown in Balance Sheet) will be credited to :
(a) Cash A/c
(b) Realisation A/c
(c) Profit & Loss A/c
(d) None of the A/c

Question: On dissolution of a firm, its Balance Sheet revealed total creditors Rs.50,000; Total Capital Rs.48,000; Cash Balance Rs.3,000. Its assets were realised at 12% less. Loss on realisation will be :
(a) Rs.6,000
(b) Rs. 11,760
(c) Rs. 11,400
(d) Rs.3,600

Question: On dissolution of a firm, out of the proceeds received from the sale of assets ………… wiltjbe paid first of all
(a) Partner’s Capital
(b) Partner’s Loan to Firm
(c) Partner’s additional capital
(d) Outside Creditors

Question: At the time of dissolution of a firm, Debtors were Rs. 17,000 out of which Rs. 500 became bad and the rest realised 60%. Which account will be debited and by how much amount?
(a) Realisation Account by Rs. 16,500.
(b) Profit and Loss Account by Rs. 500.
(c) Cash Account by Rs. 9,900
(d) Debtors Account by Rs. 7,100.

Question. While preparing memorandum Balance Sheet if the Asset side is more than the Liabilities side &Partners Capital is already appearing on the Liabilities side, the balancing figure will be :-
(a) Profit and Loss (Dr.)
(b) Creditors
(c) Furniture
(d) Cash

Question: Why is realisation account prepared
(a) Opening the account
(b) For profit sharing
(c) None of the options
(d) Closing the accounts

Question: How will you treat accumulated profit/losses at the time of dissolution of the firm
(a) Transferred to partners Capital A/C
(b) Transferred to partners Salary A/C
(c) Transferred to partners Capital A/C
(d) None of the options

Question: Why a new partner is admitted in the firm?
(a) For Increase the Number of partners
(b) For Increase the Profit sharing Ratio
(c) None of the options
(d) For Increase the Capital of the firm.

Question: Which is the main right of a partner?
(a) Share the Profits of the firm.
(b) Stop other partners for drawings
(c) Share the old profits of the firm
(d) All of the options

Question: what will be the accounting treatment of balance of the realisation account
(a) Transferred to partners Capital A/C in their profit sharing ratio
(b) Transferred to partners Capital A/C in their old ratio
(c) Transferred to partners Capital A/C in their new ratio
(d) None of the options

Question: At the time of dissolution of the firm , if goodwill appears in the balance sheet , it is transferred to
(a) Realisation A/c
(b) Revaluation A/c
(c) Capital A/c
(d) Current Account

Question: At the time of dissolution of the firm , the assets and liabilities appearing in the balance sheet are transferred to
(a) Realisation A/c
(b) Real Account
(c) Capital A/c
(d) None of the options

Question: Dissolution of the firm means
(a) Business of the firms ends
(b) Assets Sold
(c) All of the options
(d) Liabilities paid

Question: The modes by which a firm may be dissolved are
(a) By Mutual agreement
(b) Compulsory Dissolution
(c) All of the options
(d) By Notice

Question: at the time of dissolution of firm, loan from partner is
(a) Transferred to realisation A/transferred to partners capital A/c
(b) None of the options
(c) Not transferred to realisation A/c

Question: Where it is agreed that a partner will be paid a lump sum amount for dissolution, if the payment is made by the firm, the payment is debited to
(a) Concerned partners capital Account
(b) Realisation Account
(c) All the partners capital Account
(d) None of the options

Question: Unrecorded assets when realised is credit to
(a) Partners capital A/c
(b) Current Account
(c) Realisation A/c
(d) None of the options

Question: Unrecorded Liabilities when paid are debited to
(a) Realisation A/c
(b) Partners capital A/c
(c) Current Account
(d) None of the options

Question: How will goodwill account appearing in the balance sheet be treated in case of dissolution of the firm
(a) By transferring to realisation A/c (Dr. Side)
(b) By transferring to realisation A/c (Cr. Side)
(c) Both Side
(d) None of the options

Question: According to Section 30 of Partnership Act 1932:
(a) New partner will bring capital and goodwill in cash
(b) A Minor can be admitted as a partner by the consent of all partners for the time being.
(c) New partner will inspect the books of accounts
(d) New partner is allowed to share old profits

Question: The incoming partner cannot acquire his share of profits :
(a) From the old partners in their new profit sharing ratio
(b) From the old partners in their old profit sharing ratio
(c) From one or more partners (not from all partners)
(d) From the old partners in some agreed ratio

Question: At the time of admission of a new partner, the new partner acquires his share from the old partners in the:
(a) New Ratio
(b) New Ratio
(c) Sacrificing ratio
(d) Old ratio

Question: Section ____ of the Indian Partnership Act provides that a new partner shall not be inducted into a firm without the consent of all existing partners
(a) 31
(b) 35
(c) 40
(d) 45

Question: When a new partner is admitted he acquires his share of profits from the old partners , this will ____ the old partners shares in profits:
(a) Remain same
(b) No change
(c) Decrease
(d) Reduce

Question: Sacrifice ratio is used only for
(a) Distribution of Premium for goodwill
(b) Revaluation profit
(c) Distribution of Reserve
(d) Revaluation of Assets

Question. On dissolution goodwill realised shown in balance sheet is recorded as :-
(a) Bank/cash A/cDr., To RealisationA/c
(b) Partner’s Capital A/cDr., To Bank/CashA/c
(c) Realisation A/c Dr., To Bank/CashA/c
(d) Realisation A/c Dr., To Bank/CashA/c

Question. There were investment worth Rs. 1,20,000, 75% of the investment were taken over by a Partner at75% of their book value. The value at which the investment are taken over is:-
(a) Rs. 90,000
(b) Rs. 67,500
(c) Rs. 80,000
(d) Rs. 65,000

Question. Realisation expenses of Rs. 7,000 were to be paid by the partner. The firm will be paying him a remuneration of Rs. 7,500 for the dissolution work. The Partner’s Capital Account will be credited with and Rs. :-
(a) Rs. 7,500
(b) Rs. 14,500
(c) Rs. 7,000
(d) Rs. 7,300 

Question. ‘A’ one of the Partners was to bear all the Realisation Expenses for which he was given a commission of 3% of net cash realised from Dissolution. Cash realised from Assets was Rs. 25,000. Amount paid for paying off liabilities amounted to Rs. 5,000. The amount of commission will be:-
(a) Rs. 750
(b) Rs. 150
(c) Rs. 800
(d) Rs. 600 

Question. 50% of the Furniture valued at Rs. 20,000, taken by a Partner at Rs. 18,000, and remaining50% will be sold at 20%less than the book value, amount transferred to Bank Account will be:-
(a) Rs. 20,000
(b) Rs. 10,000
(c) Rs. 16,000
(d) Rs. 18,000

Question. In case of dissolution of the partnership firm, Provision for Doubtful Debts is transferred to __________Account.

Question. Dissolution of Partnership may or may not involve ___________ of the firm.

Question. When any asset is taken by the partner at the time of dissolution of the partnership firm then______

Question. Asset taken by a partner at the time of dissolution is_______

Question. Loss of realization Account is debited to Partner’s Capital Account is the __________.

Question. When Realisation expenses are paid by a partner on behalf of the firm, Partner’s Capital Account will be________.

Question. Realisation Account is ______

Question. Profit on realisation is credited to Partner’s Capital Account in their ______________.

Question. A firm may be compulsory dissolved when all the partners or all the partners except one become _________.

Question. Firm’s Property is applied first for settling ____________.

Question. Dissolution of Partnership is different from Dissolution of Partnership Firm.

Question. The court can order the Dissolution of a Partnership Firm, if any of the partners become a person of unsound mind

Question. When the Expenses are borne and paid by the Partner out of his own pocket. Then Journal Entry for realization expenses is passed

Question. For paying off firm’s debts all partners are jointly and separately liable to pay.

Question. Partner’s Loan Account is transferred to Realisation Account.

Question. Dissolution of Partnership means change in existing relations of the partnersX

Question. Change in Business Relationship among the Partner’s is Dissolution of Partnership

Question. When the business of the firm is unlawful then it is compulsory Dissolved.

Question. Assets having provisions are recorded in Realisation Account at its net value. F

Question. Partners Loan is an outside Liability

1 Bank overdraft will be transferred to :	a) Partners Capital account
2 Bank loan will be transferred to :	b) Partners current account
	c) Bank account
	d) Realisation account

1 At the time of dissolution of a Partnership firm Partners Capital account will closed by	a) Realisation account
2 At the time of dissolution of a Partnership firm Partner loan account will be closed by	b) Partner current account
	c) Partners Capital account
	d) Bank account

1 Dissolution of Partnership which account is prepared	a) Profit and loss account
2 Dissolution of Partnership firm which account is prepared :	b) Realisation account
	c) Revaluation account
	d) Profit and loss Appropriation account