RAMAGYA SCHOOL

(A unit of Sai Chhaya Education & Welfare Society)

SESSION : 2024-25
SUBJECT : ACCOUNTANCY
CLASS : XII-B

SECTION-A
Q1. Aavya, Mitansh and Praveen were partners in a firm. On 31st March, 2023, the firm was dissolved. Creditors
took over furniture of book value of 50,000 at 45,000 in part settlement of their amount of < 60,000. The balance
amount was paid to them through cheque. The amount paid through cheque will be :

(A) 10,000 (B) 50,000 (C) 45,000 (D) 15,000

Q2. At the time of dissolution of a firm, the total assets were 6,00,000 and outside liabilities were 2,40,000. If
assets realised 7,20,000 and realisation expenses of 8,000 were paid, the profit or loss on realisation will be :

(A) Loss 1,20,000 (B) Profit 1,20,000 (C) Loss 1,12,000 (D) Profit 1,12,000
Q3. Assertion (A) : The court does not intervene when dissolution of partnership takes place.
Reason (R) : Dissolution of partnership takes place by mutual agreement between the partners.
Choose the correct option from the following :

(A) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is incorrect, but Reason (R) is correct.
(D) Assertion (A) is correct, but Reason (R) is incorrect.
Q4. Lata, Mehu and Namita were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 1. They decided
to dissolve the firm on 31st March, 2023. Creditors took over stock of book value of 80,000 at 80%, in part
settlement of their amount of 90,000. The balance amount was paid to the creditors by cheque. The amount paid
by cheque to the creditors will be :

(A) 26,000 (B) 64,000 (C) 80,000 (D) 1,44,000

Q5. There are two statements Assertion (A) and Reason (R) :

Assertion (A) : Court does not intervene in case of dissolution of partnership.

Reason (R) : Dissolution of partnership takes place by mutual agreement
among partners.
Choose the correct option from the following :
(A) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
(C) Assertion (A) is correct, but Reason (R) is incorrect.
(D) Assertion (A) is incorrect, but Reason (R) is correct.
Q6. Which of the following will be transferred to Realisation Account at the
time of dissolution of firm ?

(i) Provision for Doubtful Debts

(ii) Partners loan
(iii) General Reserve
(iv) Goodwill
(a) (i) and (iv)
(b) (i), (ii) and (iv)
(c) (i), (iii) and (iv)
(d) (i), (ii) and (iii)
Q7. Rama, a partner took over Machinery of ₹ 50,000 in full settlement of her Loan of ₹ 60,000. Machinery was
already transferred to Realisation Account. How it will effect the Realisation Account?
A. Realisation Account will be credited by ₹ 60,000
B. Realisation Account will be credited by ₹ 10,000
C. Realisation Account will be credited by ₹ 50,000
D. No effect on Realisation Account

Q8. Dada, Yuvi and Viru were partners sharing profits and losses in the ratio 3:2:1. Their 1 books showed Workmen
Compensation Reserve of ₹ 1,00,000. Workmen Claim amounted to ₹ 60,000. How it will affect the books of
Accounts at the time of dissolution of firm?
A. Only ₹ 40,000 will be distributed amongst partner’s capital account
B. ₹ 1,00,000 will be credited to Realisation Account and ₹ 60,000 will be paid off.
C. ₹ 60,000 will be credited to Realisation Account and will be even paid off. Balance ₹ 40,000 will be distributed
amongst partners.
D. Only ₹ 60,000 will be credited to Realisation Account and will be even paid off

Q9. At the time of dissolution of a firm, Creditors are ₹ 70,000; Firm’s Capital is ₹ 1,20,000; Cash Balance is ₹
10,000. Other assets realised ₹ 1,50,000. Gain/Loss in the realisation account will be:

a) ₹ 30,000 (Gain) b) ₹ 40,000 (Gain) c) ₹ 40,000 (Loss) d) ₹ 30,000 (Loss)

Q11. State the order of payment of the following, in case of dissolution of partnership firm.

i. to each partner proportionately what is due to him/her from the firm for advances as distinguished from capital
(i.e. partner’ loan);

ii. to each partner proportionately what is due to him on account of capital; and

iii. for the debts of the firm to the third parties

Q12.State giving reasons, which of the following statements are true or false: 1. Dissolution of a partnership is
different from dissolution of a firm, 2. A partnership is dissolved when there is a death of a partner, 3. A firm is
dissolved when all partners give consent to it. 4. A firm is compulsorily dissolved when a partner decide to retire. 5.
Dissolution of a firm necessarily involves dissolution of partnership. 6. A firm is compulsorily dissolved when all
partners or when all except one partner become involvent. 7. Court can order a firm to be dissolved when a
partner becomes insane. 8. Dissolution of partnership can not take place without intervention of the court.

Q12. On dissolution of a firm, bank overdraft is transferred to :

(a) Cash Account (b) Bank Account (c) Realisation Aaccount (d) Partner’s capital Account.

Q13. On dissolution of a firm, partner’s loan account is transferred to:

(a) Realisation Account (b) Partner’s Capital Account (c) Partner’s Current Account (d) None of the above.

Q14. After transferring liabilities like creditors and bills payables in the Realisation Account, in the absence of any
information regarding their payment, such liabilities are treated as:

(a) Never paid (b) Fully paid (c) Partly paid (d) None of the above.

Q15. When realisation expenses are paid by the firm on behalf of a partner, such expenses are debited to:

(a) Realisation Account (b) Partner’s Capital Account (c) Partner’s Loan Account (d) None of the above.
Q16. Unrecorded assets when taken over by a partner are shown in :

(a) Debit of Realisation Account (b) Debit of Bank Account (c) Credit of Realisation Account (d) Credit of Bank
Account.

Q17. Unrecorded liabilities when paid are shown in:

(a) Debit of Realisation Account (b) Debit of Bank Account (c) Credit of Realisation Account (d) Credit of Bank
Account.

Q18. The accumulated profits and reserves are transferred to :

(a) Realisation Account (b) Partners’ Capital Accounts (c) Bank Account (d) None of the above.

Q19.

Q20.State giving reasons, which of the following statements are true or false:

1. Dissolution of a partnership is different from dissolution of a firm,

2. A partnership is dissolved when there is a death of a partner,

3. A firm is dissolved when all partners give consent to it.

4. A firm is compulsorily dissolved when a partner decide to retire.

5. Dissolution of a firm necessarily involves dissolution of partnership.

6. A firm is compulsorily dissolved when all partners or when all except one partner become involvent.

7. Court can order a firm to be dissolved when a partner becomes insane.

8. Dissolution of partnership can not take place without intervention of the court.

SECTION -B
Q21.Rusting, a partner of a firm under dissolution was to get a remuneration 2% of the total assets realised other
than cash and 10% of the amount distributed to the partners. Sundry assets (including Cash ₹ 8,000) realised at ₹
1,16,000 and sundry liabilities to be paid ₹ 31,340.Calculate Rustings’s remuneration and Show your workings
clearly. Also pass necessary journal entry for remuneration.

Or

A, B and C were partners sharing profits, and losses in the ratio of 2:2:1. C died on 1st July, 2023 on which date the
capitals of A, B and C after all necessary adjustments stood at ₹74,000, ₹ 63,750 and 42,250 respectively. A and B
continued to carry on the business for six months without settling the accounts of C. During the period of six
months from 1 -7-2023, a profit of ₹ 20,500 is earned using the firm’s property. State 3 which of the two options
available u/s 37 of the Indian Partnership Act, 1932 should be exercised by executors of C and why?.

Q22. Distinguish between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership Firm’ based on: (i)
Settlement of assets and liabilities (ii) Economic relationship (iii) Continuation

OR

The book value of assets (other than cash and bank) transferred to Realisation Account is Rs. 1,00,000. 50% of the
assets are taken over by a partner Atul, at a discount of 20%; 40% of the remaining assets are sold at a profit of
30% on cost; 5% of the balance being obsolete, realised nothing and remaining assets are handed over to a
Creditor, in full settlement of his claim. You are required to record the journal entries for realisation of assets.

Q23. Pass necessary journal entries in the following cases on the dissolution of a partnership firm of partners X, Y,
A and B:

(i) Realization expenses of ` 5,000 were to borne by X, a partner. However, it was paid by Y.

(ii) Investments costing ` 25,000 (comprising 1000 shares), had been written off from the books completely. These
shares are valued at ` 20 each and were divided amongst the partners.

(iii) Y’s loan of `50,000 settled at ` 48,000.

(iv) Machinery (book value ` 6,00,000) was given to creditor at a discount of 20%.

Q24. The firm of R, K and S was dissolved on 31.3.2019. Pass necessary journal entries for the following after
various assets (other than cash and Bank) and the third party liabilities had been transferred to realisation account.
(i) K agreed to pay off his wife’s loan of ₹ 6,000.

(ii) Total Creditors of the firm were ₹ 40,000. Creditors worth ₹10,000 were given a piece of furniture costing
₹8,000 in full and final settlement. Remaining creditors allowed a discount of 10%.

(iii) A machine that was not recorded in the books was taken over by K at ₹ 3,000 whereas its expected value was
₹ 5,000 and The firm had a debit balance of ₹ 15,000 in the profit and loss A/c on the date of dissolution.

Q25.Record journal entries at the time of dissolution of a partnership firm of Vibha, Shobha and Anubha in the
following cases:

a) Dissolution expenses amounted to Rs. 6,500.

b) Dissolution expenses Rs. 7,800 were paid by Anubha.

c) Vibha was appointed to look after the dissolution process for which she was given a remuneration of Rs. 12,000

d) Shobha was appointed to look after the dissolution work for which she was allowed a remuneration of
Rs.15,000. She agreed to bear dissolution expenses. Actual dissolution expenses paid by her amounted to Rs.
11,800.

e) Anubha was to look after the dissolution process for which she was allowed a remuneration of Rs. 12,000 she
also agreed to bear dissolution expenses. Actual expenses Rs. 9,500 were paid by the firm.

f) Anubha looked after the dissolution work for remuneration of Rs. 8,500 and agreed to bear dissolution expenses
upto Rs. 6,000. Actual expenses paid by her were Rs. 7,600.
Q26. Give journal entries for the following transactions :

1. To record the realisation of various assets and liabilities,

2. A Firm has a Stock of Rs. 1,60,000. Aziz, a partner took over 50% of the Stock at a discount of 20%,

3. Remaining Stock was sold at a profit of 30% on cost,

4. Land and Buildging (book value Rs. 1,60,000) sold for Rs. 3,00,000 through a broker who charged 2%,
commission on the deal,

5. Plant and Machinery (book value Rs. 60,000) was handed over to a Creditor at an agreed valuation of 10% less
than the book value,

6. Investment whose face value was Rs. 4,000 was realised at 50%.

SECTION-C
Q27.Archana, Vandana and Arti were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. Their
Balance Sheet on 31st March, 2023 was as follows :

The firm was dissolved on the above date.

(i) Assets were realised as follows :
Debtors 40,000
Stock 50,000
Plant 60,000
(ii) 25% of the Investments were taken over by Vandana at 18,000. Remaining Investments were taken over by
Archana at 10% less than its book value.
(iii) Expenses of realisation 20,000 were paid by Arti.
Prepare Realisation Account.
OR
Give the journal entry(ies) to be recorded for the following, in case of the dissolution of a partnership firm.
1. For closure of assets accounts.
2. For closure of liabilities accounts.
3. For sale of assets.
4. For settlement of a creditor by transfer of fixed assets to him.
5. For expenses of realisation when actual expenses are paid by the partner on behalf of the firm.
6. When a partner discharges the liability of the firm.
7. For payment of partner’s loan.
8. For settlement of capital accounts.

Q28. Sonia and Rohit were partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2023
their Balance Sheet was as follows :

The firm was dissolved on the above date on the following terms :
(i) Building, machinery and furniture realised ₹ 3,44,000.
(ii) Debtors realised 90% only.
(iii) Creditors took away half of the stock in full settlement of their account.
(iv) Remaining stock realised ₹ 72,000.
(v) Realisation expenses amounting to ₹14,000 were paid by Rohit.
Prepare Realisation Account.

Q29. Charu, Dhwani, Iknoor and Paavni were partners in a firm. They had entered into partnership firm last year
only, through a verbal agreement. They contributed Capitals in the firm and to meet other financial requirements,
few partners also provided loan to the firm. Within a year, their conflicts arisen due 4 to certain disagreements
and they decided to dissolve the firm. The firm had appointed Ms. Kavya, who is a financial advisor and legal
consultant, to carry on the dissolution process. In the first instance, Ms. Kavya had transferred various assets and
external liabilities to Realisation A/c. Due to her busy schedule; Ms. Kavya has delegated this assignment to you,
being an intern in her firm. On the date of dissolution, you have observed the following transactions: (i) Dhwani’s
Loan of ₹ 50,000 to the firm was settled by paying ₹ 42,000. (ii)Paavni’s Loan of ₹ 40,000 was settled by giving an
unrecorded asset of ₹ 45,000. (iii)Loan to Charu of ₹ 60,000 was settled by payment to Charu’s brother loan of the
same amount. (iv)Iknoor’s Loan of ₹ 80,000 to the firm and she took over Machinery of ₹ 60,000 as part payment.
You are required to pass necessary entries for all the above mentioned transactions.
OR
Q29. Madhav, Madhusudan and Mukund were partners in Jaganath Associates. They decided to dissolve the firm
on 31st March 2021. Pass necessary journal entries for the following transactions after various assets (other than
cash) and third-party liabilities have been transferred to realization account: (i) Old machine fully written off was
sold for ₹ 42,000 while a payment of ₹ 6,000 is made to bank for a bill discounted being dishonoured. (ii)
Madhusudan accepted an unrecorded asset of ₹80,000 at ₹75,000 and the balance through cheque, against the
payment of his loan to the firm of ₹1,00,000. (iii) Stock of book value of ₹30,000 was taken by Madhav,
Madhusudan and Mukund in their profit sharing ratio. (iv) The firm had paid realization expenses amounting to
₹5,000 on behalf of Mukund. (v) There was a vehicle loan of ₹ 2,00,000 which was paid by surrender of asset to the
bank at an agreed value of ₹ 1,40,000 and the shortfall was met from firm’s bank account.
 SECTION - D
Q30. Nandu, Bandu and Chandu were partners in a firm. On 31st March, 2023 they decided to dissolve the firm.
Pass necessary journal entries for the following transactions after the various assets (other than cash and bank)
and outside liabilities have been transferred to Realisation Account :

(i) Stock of 1,40,000 was taken by Nandu at a discount of 30%.

(ii) Creditors to whom the firm owed < 40,000 accepted stock at 4,000 and the balance amount was paid to them
by a cheque.
(iii) An old computer which had been written off completely from the books was sold for 4,000, whereas its
estimated market value was 10,000.
(iv) Chandu had given a loan of < 1,00,000 to the firm, which was paid to him through a cheque.
(v) 24,000 were recovered from a debtor which was written off as bad debt in the previous year.
(vi) Bandu was appointed to look after the dissolution work for which he was allowed a remuneration of 26,000.
Bandu agreed to bear the dissolution expenses. Actual dissolution expenses of 36,000 were paid by Bandhu.
OR
What journal entries would be recorded for the following transactions on the dissolution of a firm of Arti and
Karim after various assets (other than cash) on the third party liabilities have been transferred to Reliasation
account.
1. Arti took over the Stock worth Rs. 80,000 at Rs. 68,000.
2. There was unrecorded Bike of Rs. 40,000 which was taken over by Mr. Karim.
3. The firm paid Rs. 40,000 as compensation to employees.
4. Sundry creditors amounting to Rs. 36,000 were to be settled after 2 months but paid immediately at a discount
of 6 p.a.%.
5. Deferred revenue expenditure existed 50,000
6. Loss on realisation Rs. 42,000 was to be distributed between Arti and Karim in the ratio of 3:4.

Q31. Abhay, Bikram and Chris were partners in a firm sharing profits and
losses equally. They decided to dissolve their partnership firm on 31st March, 2023.
The firm’s Balance Sheet on the date of dissolution was as follows :

The following information is available :

(i) Plant and Machinery was taken over by Abhay at an agreed valuation of 75,000.
(ii) Furniture realised 40,000.
(iii) Motor car was taken over by Bikram for 1,30,000.
(iv) Debtors realised 10% less.
(v) 10% of the stock was taken over by Chris for 4,500. The remaining stock was sold for 30,000.
(vi) Realisation expenses amounted to 5,000.
Prepare Realisation Account.
Q32. M, S and R were partners in a firm sharing profits and losses in the ratio
of 2 : 1 : 2. On 31.03.2022, their Balance Sheet was as follows :

On the above date the firm was dissolved. Fixed assets realised 1,20,000 and stock realised 10,000. Debtors were
realised at their book value and liabilities were paid in full.
Prepare Realisation Account & Partner`s Capital account.

Q33. Aadish and Shreyansh were partners in a firm sharing profits and losses
in the ratio of 3 : 2. On 31st March, 2022 their Balance Sheet was as follows :
The firm was dissolved on 31st March, 2022 on the following terms :

(i) Debtors realised 17,000 and plant realised 10% more than the book value.

(ii) Aadish promised to pay mrs. Aadish loan and took away stock at 20,000.

(iii) Shreyansh took away half of the investments at a discount of 10%. Remaining investments realised 4,500.

(iv) Creditors were paid off at a discount of 10%.

(v) Expenses of realisation amounted to 7,000.

Prepare Realisation Account.

Q34. Sunny and Bobby were partners in a firm sharing profits and losses in the ratio of 3:2, their balance sheet as
at 31st March, 2012:

The firm was dissolved on 31st March, 2012. The assets were realized and the liabilities were paid as under: (a)
Sunny promised to pay off Mrs. Sunny’s Loan (b) Bobby took away stock at 20% discount and 80% of the
investments at 10% discount. (c) Dharam, a debtor of Rs. 60,000 had to pay the amount due 2 months after the
date of dissolution. He was allowed a discount of 9% p.a. for making immediate payment. (d) Creditors were paid
Rs.1,75,000 in full settlement of their claim. (e) 90% of Other fixed assets realised Rs. 1,98,000 and remaining were
realised at discount of 15%. (f) Balance of investments were sold at 75% value and Fixed Deposits were realised at
110%. (g) There was an old furniture which has been written off completely from the books, Bobby took away the
same for Rs. 41,000 against his loan and balance to him was given in cash. (h) Realisation expenses Rs. 20,000
were paid by Sunny and Bobby equally on behalf of the firm. You are required to prepare Realisation A/c

OR

Q34. A , B & C are partners sharing profits & losses in 3:2:1. they decide to dissolve the firm on 1st jan 2023.

COMPLETE THE MISSING FIGURES

REALISATION A/C

DR. CR.

PARTICULARS AMT. PARTICULARS AMT.

 To sundry assets 2,47,500 By sundry liabilities 60,000

Stock 59,400 PFDD 3,000

Debtors 57,000 Creditors 46,200

P/M 1,31,100 Bills Payable 10,800

To bank A/C (liabilities paid off) ____?__ By ____?_____ ___?____

To _________?______ ____?_ By Bank A/C (asset realised ) ___?____

Stock 45,000

Goodwill 12,000

Debtors 34,200

P/M 90,000

By loss on realisation

A’s capital

B’s capital

C’s capital 9,450

__?___ __?___

LOAN FROM A A/C

DR. CR.

PARTICULARS AMT. PARTICULARS AMT.

To ______?______ __?___ By balance b/d ___?____

____?__ ___?____

PARTNER’S CAPITAL A/C

DR. CR.

PARTICULARS A B C PARTICULARS A B C

To ____?______ ? ? ? By ____?_________ ? ? ?

To bank A/C (final ? ? ? By Workmen compensation ? 3,000 ?

payment ) A/C

By bank A/c (Amount

 brought in) ? 3,900 ?

? 18,900 ? 64,500 ? 61,50

0

Bank A/C

Dr. Cr.

PARTICULARS AMT. PARTICULARS AMT.

To balance b/d ? By realisation A/C (liabilities paid) ?

To Realisation A/C (sale of unrecorded 15,000 By realisation A/C (expenses ) 2,400

asset)
By loan from A A/C 57,000
To __?________
? By ____?_____ ?
To __?________
? By ____?_____ ?

? ?