Commerce Exam > Commerce Questions > Name the Account which is prepared for findin...
Start Learning for Free
Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.
- a)Cr.Side of Revaluation Account
- b)Dr. side of Revaluation Account
- c)Dr. side of Realisation Account
- d)Cr. Side of Realisation Account
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Name the Account which is prepared for finding the profit or loss on g...
All provisions given against the assets will be transferred to the credit side of realization account. Provision for doubtful debts will take place in the credit side of realization account only, after that there is no use of this provision.
This question is part of UPSC exam. View all Commerce courses
Most Upvoted Answer
Name the Account which is prepared for finding the profit or loss on g...
The answer should be realization account,rather than Dr. side or cr. side. You have profit (cr.>dr.)if the difference is on debit side to be credited partners capital account and loss(Dr>cr.)to be debited to partners capital account.
Community Answer
Name the Account which is prepared for finding the profit or loss on g...
Answer:
The correct answer is option 'D', which is the "Cr. Side of Realisation Account".
Explanation:
When a company decides to wind up its operations and sell all its assets, it needs to prepare the Realisation Account. The Realisation Account is a nominal account that is prepared to determine the profit or loss on the realization of assets and payment of liabilities during the liquidation process.
The Realisation Account is prepared in the following manner:
1. Opening Balance: If there is any balance in the Realisation Account from previous years, it is brought forward as the opening balance.
2. Sale of Assets: The company sells its assets, such as land, buildings, machinery, etc., and the proceeds from these sales are recorded on the credit side of the Realisation Account.
3. Payment of Liabilities: The company uses the proceeds from the sale of assets to pay off its liabilities, such as loans, creditors, etc. The payments made towards these liabilities are recorded on the debit side of the Realisation Account.
4. Profit or Loss: The difference between the total amount received from the sale of assets and the total amount paid towards liabilities represents the profit or loss on realization. If the credit side (sale proceeds) is higher than the debit side (liability payments), it indicates a profit. On the other hand, if the debit side is higher than the credit side, it indicates a loss.
5. Closing Balance: After recording all the sales and payments, the Realisation Account is balanced. If there is a profit, it is transferred to the partners' capital accounts in their profit-sharing ratio. If there is a loss, it is transferred to the partners' capital accounts in their sacrificing ratio.
Therefore, the Realisation Account plays a crucial role in determining the profit or loss on the realization of assets and the payment of liabilities during the liquidation process. The credit side of the Realisation Account represents the sale proceeds of assets, while the debit side represents the payments made towards liabilities.
The correct answer is option 'D', which is the "Cr. Side of Realisation Account".
Explanation:
When a company decides to wind up its operations and sell all its assets, it needs to prepare the Realisation Account. The Realisation Account is a nominal account that is prepared to determine the profit or loss on the realization of assets and payment of liabilities during the liquidation process.
The Realisation Account is prepared in the following manner:
1. Opening Balance: If there is any balance in the Realisation Account from previous years, it is brought forward as the opening balance.
2. Sale of Assets: The company sells its assets, such as land, buildings, machinery, etc., and the proceeds from these sales are recorded on the credit side of the Realisation Account.
3. Payment of Liabilities: The company uses the proceeds from the sale of assets to pay off its liabilities, such as loans, creditors, etc. The payments made towards these liabilities are recorded on the debit side of the Realisation Account.
4. Profit or Loss: The difference between the total amount received from the sale of assets and the total amount paid towards liabilities represents the profit or loss on realization. If the credit side (sale proceeds) is higher than the debit side (liability payments), it indicates a profit. On the other hand, if the debit side is higher than the credit side, it indicates a loss.
5. Closing Balance: After recording all the sales and payments, the Realisation Account is balanced. If there is a profit, it is transferred to the partners' capital accounts in their profit-sharing ratio. If there is a loss, it is transferred to the partners' capital accounts in their sacrificing ratio.
Therefore, the Realisation Account plays a crucial role in determining the profit or loss on the realization of assets and the payment of liabilities during the liquidation process. The credit side of the Realisation Account represents the sale proceeds of assets, while the debit side represents the payments made towards liabilities.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer?
Question Description
Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer?.
Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Name the Account which is prepared for finding the profit or loss on getting amount from selling of all assets and paying amount of liabilities.a)Cr.Side of Revaluation Accountb)Dr. side of Revaluation Accountc)Dr. side of Realisation Accountd)Cr. Side of Realisation AccountCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup