Dissolution of a Partnership Firm- Assertion & Reason Type Questions -

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Realisation account is prepared in the dissolution of the firm.

Reason (R): Dissolution of partnership involves the partners selling the assets and settling the liabilities. Thus, various amounts are recovered or paid to partners.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Partner ’s loan account is prepared before partners’ capital accounts.

Reason (R): At the time of dissolution, capitals are paid off, only if any balance is left after payment of the partner ’s loan.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Dissolution of partnership is different from the dissolution of the Partnership firm.

Reason (R): Dissolution of partnership doesn’t dissolve the firm but the firm is dissolved in the partnership firm.

Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:

Assertion (A): Rajiv and Vinod, who share the profit and losses in the ratio 2:3, are dissolving the firm. There is a general reserve in the balance of Rs.60,000 in the balance sheet. The accountant transferred Rs.24,000 in Rajiv’s Capital and Rs.36,000 in Vinod’s Capital Accounts.

Reason (R): The undistributed profits and losses and reserves are always transferred to partners’ capital accounts in their profit sharing ratio and not to the realisation account.