CBSE Class 12 Accountancy Dissolution Of Partnership Firm MCQs Set A

Refer to CBSE Class 12 Accountancy Dissolution Of Partnership Firm MCQs Set A provided below. CBSE Class 12 Accountancy MCQs with answers available in Pdf for free download. The MCQ Questions for Class 12 Accountancy with answers have been prepared as per the latest syllabus, CBSE books and examination pattern suggested in Class 12 by CBSE, NCERT and KVS. Multiple Choice Questions for Chapter 5 Dissolution Of Firm are an important part of exams for Class 12 Accountancy and if practiced properly can help you to get higher marks. Refer to more Chapter-wise MCQs for CBSE Class 12 Accountancy and also download more latest study material for all subjects

MCQ for Class 12 Accountancy Chapter 5 Dissolution Of Firm

Class 12 Accountancy students should refer to the following multiple-choice questions with answers for Chapter 5 Dissolution Of Firm in Class 12. These MCQ questions with answers for Class 12 Accountancy will come in exams and help you to score good marks

Chapter 5 Dissolution Of Firm MCQ Questions Class 12 Accountancy with Answers

Question: Dissolution of the firm means

a) All of the options

b) Business of the firms ends

c) Assets Sold

d) Liabilities paid

Answer: A

 

Question: The modes by which a firm may be dissolved are

a) All of the options

b) By Mutual agreement

c) Compulsory Dissolution

d) By Notice

Answer: 

 

Question: Why is realisation account prepared

a) Closing the accounts

b) Opening the account

c) For profit sharing

d) None of the options

Answer: A

 

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

Answer:A

 

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 Capital A/C

c) Transferred to partners Salary A/C

d) None of the options

Answer: A

 

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

Answer: A

 

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

Answer: A

 

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

Answer: A

 

Question: at the time of dissolution of firm, loan from partner is

a) Not transferred to realisation A/c

b) Transferred to realisation A/transferred to partners capital A/c

c) None of the options

Answer: A

 

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

Answer: A

  

Question: Unrecorded assets when realised is credit to

a) Realisation A/c

b) Partners capital A/c

c) Current Account

d) None of the options

Answer: A

 

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

Answer: A

 

Question: Why a new partner is admitted in the firm?

a) For Increase the Capital of the firm.

b) For Increase the Number of partners

c) For Increase the Profit sharing Ratio

d) None of the options

Answer: A

 

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

Answer: A

 

Question: According to Section 30 of Partnership Act 1932:

a) A Minor can be admitted as a partner by the consent of all partners for the time being.

b) New partner will bring capital and goodwill in cash

c) New partner will inspect the books of accounts

d) New partner is allowed to share old profits

Answer: A

 

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

Answer: A

 

Question: At the time of admission of a new partner, the new partner acquires his share from the old partners in the:

a) Sacrificing ratio

b) New Ratio

c) New Ratio

d) Old ratio

Answer: A

 

Question: Sacrifice ratio is used only for

a) Distribution of Premium for goodwill

b) Revaluation profit

c) Distribution of Reserve

d) Revaluation of Assets

Answer: A

 

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

Answer: A

 

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) Reduce

b) Remain same

c) No change

d) Decrease

Answer: A

 

Question: Is admission of a new partner a reconstitution of partnership firm:

a) Yes

b) It is dissolution of firm

c) It is called merger

d) None of the options

Answer: A

 

Question: Why new profit ratio is determined even for old partners?

a) Change in the agreement among all partners

b) No change in agreement

c) Due to change in external environment

d) All of the options

Answer: A

  

Question: Sacrificing ratio is calculated for

a) old partners

b) new partners

c) all partners (including new)

d) None of the options

Answer: A

 

Question: Revaluation Account is also known as ________

a) Profit and Loss Adjustment Account

b) Asset Account

c) Profit and Loss Account

d) None of the options

Answer: A

 

Question: At the time of increase in the value of assets which account should be debited while preparing Revaluation Account?

a) Asset A/c

b) Partners Capital A/c

c) Revaluation Account

d) None of the options

Answer: A

 

Question: Revaluation account is not prepared at the time of _________________

a) Dissolution

b) Admission

c) Retirement

d) All of the options

Answer: A

 

Question: Which of the following is calculated at the time of Retirement of a Partner?

a) Gaining Ratio

b) Old Ratio

c) Profit Sharing ratio

d) All of the options

Answer: A

 

Question: When the New ratio is deducted with Old Ratio we get:

a) Gaining Ratio

b) Sacrifice only

c) Profit Sharing ratio

d) None of the options

Answer: A

 

Question: Gaining Ratio is Applicable for:

a) Retiring partners share of goodwill only

b) For the distribution of Reserves and profits

c) For the Calculation of profit

d) For Revaluation

Answer: A

 

Question: Gaining ratio is the ratio in which continuing partners have ______ the share from the outgoing partner

a) Acquired

b) Sacrificed

c) Both Acquired and Sacrificed

d) None of the options

Answer: A

 

Question: Why there is need to calculate New profit share ratio

a) After retirement of a partner, there will be change in the continuing partners ratio.

b) After retirement of a partner, there is no change in the continuing partners ratio.

c) To settle the loan amount due to outgoing partner

d) All of the options

Answer: A

 

Question: Except outgoing partner, which other partner can be credited at the time of settlement of goodwill amount?

a) Sacrificing partner

b) Gaining partner

c) All the partners

d) None of the options

Answer: A

 

Question: Retirement or death of a partner will create a situation for the continuing partners, which is known as:

a) Reconstitution of Firm

b) Dissolution of firm

c) Amalgamation

d) None of the options

Answer: A

 

Question: New Ratio Old Ratio is called

a) Gaining Ratio

b) Profit Sharing ratio

c) Sacrificing ratio

d) None of the options

Answer: A

 

Question: How sacrificing ratio is differ from gaining ratio on the basis of mode of calculation

a) calculated by taking difference between old and new ratio

b) calculated by taking difference between new and old ratio

c) calculated by taking difference between old and gaining ratio

d) None of the options

Answer: A

 

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

Answer: A

 

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) Credit side of Capital account of all the partners

b) Debit side of Capital account of all the partners

c) Both

d) None of the options

Answer: A

 

Question: Which of the following is prepared at the time of retirement of a partner?

a) Revaluation Account

b) Profit and Loss Suspense Account

c) Both

d) None of the options

Answer: A

 

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

Answer: A

 

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

Answer: A

 

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 loans given by third party

b) After making the payment of balance of Capital Accounts of partners

c) After making the payment of above a) and b)

d) Before the payment of loans given by third party

Answer: A

 

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.

 Answer: C

 

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

Answer: C

 

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

 Answer: B

 

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

Answer: C

 

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)

Answer: B

 

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

 Answer: D

 

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

Answer: C

 

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

Answer: A

 

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

Answer: B

 

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

Answer: C

 

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

Answer: A

 

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

Answer: C

 

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

Answer: B

 

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

Answer: B

 

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.

Answer: C

 

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.

Answer: B

 

Question: The firm paid realisation expenses of Rs. 10,000 on behalf of Nihar,a partner with whom it was agreed at Rs. 25,000. Realisation Expenses came to Rs. 35,000. Realisation Account will be debited by

a) Rs. 10,000.

b) Rs. 35,000.

c) Rs. 25,000.

d) Rs. 70,000.

Answer: C

 

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.

Answer: C

 

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.

Answer: C

 

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.

Answer: A

 

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

Answer: A

 

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

 Answer: A

 

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

Answer: D

 

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

Answer: B

 

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

Answer: C

 

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

Answer: B

 

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

Answer: D

 

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.

Answer: A

 

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

Answer: C

 

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.

Answer: C

 

Question: On dissolution of a firm, It’s Balance Sheet revealed total creditors Rs 50,000, total capital Rs 48,000, Cash balance Rs 3000, It’s assets were realized at 12% less. Loss on realization will be:
a) Rs 6000
b) Rs 11760
c) Rs 11400
d) Rs 3600
Answer : C

Question: On dissolution of a partnership firm, profit or loss on realization is distributed among the partners:
a) In capital ratio
b) In profit sharing ratio
c) Equally
d) None of the above
Answer : B

Question: An unrecorded asset was valued ar Rs 100000.On Firm’s dissolution, it was sold for 52%.Realisation Account will be credited with
a) Rs 48000
b) Rs 100000
c) Rs 52000
Answer : C

Question: Unrecorded liability, when paid on dissolution of a firm is debited to:
a) Profit & Loss account
b) Realizationaccount
c) Liabilities account
d) No need to record
Answer : B

Question: In the event of dissolution of a partnership firm, the provision for doubtful debts is transferred to:
a) Realization account
b) Partner’s Capital Accounts
c) Cash account
d) Partner’s loan account
Answer : A

Question: On dissolution of a firm, a partner paid Rs 700 for firm’s realization expenses. Which account will be debited?
a) Cash account
b) Realisation account
c) Capital account of the partner
d) Profit & Loss account.
Answer : B

Question: A Partner took over the Investments of Rs 15000 at Rs 19000 on dissolution of a Firm. What amount will be credited in Realisation Account?
a) Rs 15000
b) Rs 19000
c) Rs 4000
d) Rs 23000
Answer : B

Question: On Firm’s Dissolution, what entry will be Passed on realization of Goodwill which was shown in Balance sheet?
a) Goodwill A/C----Dr   
     To Realisation     
b) Cash A/C-----Dr   
    To Realisation    
c) Goodwill A/C---Dr
        To Cash
Answer : B

Question: Which o the following will be Transferred to Realisation Account?
A. Goodwill appearing in the books at the time of Dissolution of Firm
B. Investment Fluctuation Reserve
C. Provision for Doubtful Debts
D. General Reserve
Choose the Correct Option:
1.D Only
2. A, B, C Only
3.Band C Only
4.Aand C Only
Answer : A

Question: Identify the sequence of application of assets at the time of Dissolution of a Firm:
A. Partner’s Loans and Advances
B. Partner’s Capital
C. Profit among the Partners at their profit sharing Ratio
D. Third Parties such as Creditors and Bank Loan
Choose the correct option:
1. D, C, B and A
2. A, B, C and D
3. D, B, C and A
4. D, A, B and C
Answer : D

Question: Name the Asset that is not transferred to the Realisation account, but bring certain amount of cash against its disposal at the time of dissolution of the Firm?
Answer : Unrecorded Asset

Question: What journal entry will you pass when an asset is given away to any of the Firms creditors towards full payment of dues?
Answer : 
No Entry

Part 1 Chapter 01 Accounting for Not for Profit Organisation
CBSE Class 12 Accountancy Accounting for Not for Profit Organisation MCQs
Part 1 Chapter 03 Reconstitution of a Partnership Firm Admission of a Partner
CBSE Class 12 Accountancy Admission Of A Partner MCQs
CBSE Class 12 Accountancy Reconstitution Of Firm MCQs
Part 1 Chapter 04 Reconstitution of a Partnership Firm Retirement Death of a Partner
CBSE Class 12 Accountancy Retirement or Death of a Partner MCQs
Part 2 Chapter 04 Analysis of Financial Statements
CBSE Class 12 Accountancy Analysis of Financial Statement and Tools MCQs

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