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Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:
- a)Debited to Rohan’s Capital Account
- b)Debited to Realisation Account
- c)Credited to Realisation Account
- d)Credited to Bank Account
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
Rohan, Mohan, and Sohan were partners, sharing profits equally. At the...
When a partner has given a loan to the firm, this loan is treated as a liability of the firm at the time of dissolution. The loan amount is settled by paying it through the Bank Account. Thus, Rohan's loan to the firm will be credited to the Bank Account when the loan is repaid.
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Rohan, Mohan, and Sohan were partners, sharing profits equally. At the...
Understanding Rohan's Loan in Partnership Dissolution
When a partnership firm is dissolved, the final settlement of accounts occurs, including loans made by partners to the firm. In this case, Rohan's loan to the firm needs to be treated appropriately during the dissolution process.
Loan Treatment in Dissolution
- Debited to Rohan’s Capital Account: This option is incorrect because Rohan's loan is a liability for the firm, not an asset. Debiting his capital account would imply a reduction in his share of profits, which does not apply here.
- Debited to Realisation Account: This option is also incorrect. The Realisation Account is used for transferring assets and liabilities of the partnership to reflect their realizable values during dissolution. Rohan's loan should not be debited here as it is a liability of the firm.
- Credited to Realisation Account: This option is incorrect as well. Crediting the Realisation Account would indicate a gain or asset increase, which is not applicable for a loan payable to Rohan.
Correct Treatment of Rohan’s Loan
- Credited to Bank Account: This is the correct option. Upon dissolution, Rohan's loan will be settled. As the firm pays off its liabilities, including Rohan's loan, the amount will be credited to the Bank Account. This signifies that the firm is reducing its liabilities by paying off the loan.
Conclusion
In summary, Rohan’s loan to the firm is a liability that must be settled during dissolution. The correct accounting treatment is to credit the Bank Account, reflecting the payment made to Rohan.
When a partnership firm is dissolved, the final settlement of accounts occurs, including loans made by partners to the firm. In this case, Rohan's loan to the firm needs to be treated appropriately during the dissolution process.
Loan Treatment in Dissolution
- Debited to Rohan’s Capital Account: This option is incorrect because Rohan's loan is a liability for the firm, not an asset. Debiting his capital account would imply a reduction in his share of profits, which does not apply here.
- Debited to Realisation Account: This option is also incorrect. The Realisation Account is used for transferring assets and liabilities of the partnership to reflect their realizable values during dissolution. Rohan's loan should not be debited here as it is a liability of the firm.
- Credited to Realisation Account: This option is incorrect as well. Crediting the Realisation Account would indicate a gain or asset increase, which is not applicable for a loan payable to Rohan.
Correct Treatment of Rohan’s Loan
- Credited to Bank Account: This is the correct option. Upon dissolution, Rohan's loan will be settled. As the firm pays off its liabilities, including Rohan's loan, the amount will be credited to the Bank Account. This signifies that the firm is reducing its liabilities by paying off the loan.
Conclusion
In summary, Rohan’s loan to the firm is a liability that must be settled during dissolution. The correct accounting treatment is to credit the Bank Account, reflecting the payment made to Rohan.
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Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer?.
Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer?.
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Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Rohan, Mohan, and Sohan were partners, sharing profits equally. At the time of the dissolution of the partnership firm, Rohan’s loan to the firm will be:a)Debited to Rohan’s Capital Accountb)Debited to Realisation Accountc)Credited to Realisation Accountd)Credited to Bank AccountCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
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