CBSE Questions for Class 12 Commerce Accountancy Dissolution Of Partnership Firm Quiz 1 - MCQExams.com

In Garner v. Murray, the deficiency of the insolvent partners is borne by other partners in the _________________.
  • Profit sharing ratio
  • Ratio of their capitals
  • Equal share by each
  • None of the above
On dissolution, all assets are transferred to realization account at ________.
  • Book value
  • Market value
  • Cost or market value, whatever is less
  • Replacement value
On the dissolution of a firm, loan from the wife of a partner is treated as ____________.
  • Loan from the partner
  • Outside liability
  • Preferential liability
  • Liability payable after all other debts have been paid
In India, audit of Partnership firm is:
  • Compulsory
  • Optional
  • Statutory by law
  • None of these
On the insolvency of one or more partners of a firm, the loss is borne by:
  • the creditors
  • remaining solvent partners in their capital ratio
  • all partners in their profit-sharing ratio
  • all partners in their capital ratio
When a firm is dissolved, Goodwill a/c is closed by transferring to:
  • Capital account of the partners
  • Revaluation account
  • Realisation account
  • Profit & loss account
Which of the following is not a correct statement?
  • The terms capitalisation factor and multiplier are not synonymous terms
  • Divisible profits do not includes profits on revaluation of assets
  • Managerial remuneration is to be calculated before providing for taxation
  • A company may purchase its own debentures
What journal entry is passed for realising assets to provide cash for payment of liabilities?
  • Respective Asset A/c (Book value)   Dr.
    Profit and loss A/c       (profit)             Dr.
                 To Bank A/c (sale proceeds)
                 To Profit and loss A/c (Loss)
  • Profit and loss A/c (Loss)             Dr.
              To Respective Asset A/c  (Book value)
  • Bank A/c (Sale proceeds)    A/c
               To Profit and loss (Loss) A/c
  • Realisation A/c Dr.   
             To Assets A/c 

    Cash/Bank A/c Dr. 
         To Realisation A/c 
Declaration by directors of the company at the time of solvency is called as __________.
  • Voluntary winding up
  • Declaration of insolvency
  • Declaration of solvency
  • None of the Above
Provision for bad and doubtful debts appearing in the books at the time of dissolution of firm is transferred to :
  • Capital accounts of the partners
  • Debtors account
  • Bad Debts account
  • Realisation account
Which of the following will result in dissolution of the firm?
  • Retirement
  • Death
  • Expulsion
  • Dissolution
_________ is the main objective of joint life policy.
  • To avert death /retirement of a partner
  • To meet expense on treatment of ailing partner
  • To provide fund for payment to the executor of deceased partner
  • To pay the amount due to the retiring partner
Which of these is not a method of accounting treatment of premium on joint life policy?
  • Treatment as an expense.
  • Treatments as an asset.
  • Deferred revenue expense.
  • None of these.
In dissolution of partnership, _________ account is created, whereas _________ account is prepared in dissolution of firm.
  • Revaluation, Realization
  • Realization, Revaluation
  • Revaluation, Memorandum
  • Memorandum, Realization
The journal entry for transfer of assets is ______________________.
  • Realisation A/c Dr.

    To Assets (Individually) A/c
  • Assets (Individually) A/c Dr.

    To Realisation A/c
  • Bank A/c Dr.

    To Realisation A/c
  • Realisation A/c Dr.

    To Revaluation A/c
Application to court for dissolution of a firm can be made :
  • Where the partnership is at will
  • Where the partnership is not at will
  • Where the partnership is for a fixed duration
  • In all cases
Premium paid on the life insurance policy of the proprietor should be debited to Insurance Premium Account.
  • True
  • False
Select the most appropriate alternative from those given below:
Drawing account is closed by transferring the balance to the ______ account.
  • Drawing
  • Liabilities
  • Assets
  • Capital
In dissolution of partnership, business ________ whereas in dissolution of firm, the business is ________.
  • Closes, Continued
  • Partly closes, Continued
  • Continues, Closed
  • Continues, Partly closed
According to the Partnership Act, which of this statement about the dissolution of the partnership is true.
  • Dissolution of partnership is called dissolution of the firm
  • Dissolution between the two partners is called the dissolution of the firm
  • On the completion of the venture of the firm is called the dissolution of the firm
  • Dissolution between all the partners of a firm is called dissolution of the firm
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