Commerce Exam > Commerce Questions > A contingent liability for bills receivable d...
Start Learning for Free
A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac?
Most Upvoted Answer
A contingent liability for bills receivable discounted materialized to...
Contingent Liability and Surrendered Joint Life Policy in Realisation Account
Contingent Liability for Bills Receivable Discounted
In accounting, a contingent liability refers to a potential future obligation that may or may not occur, depending on certain events. In the given scenario, the contingent liability for bills receivable discounted has materialized to the extent of Rs 2500. This means that the company has now become liable to pay Rs 2500 to the bank or financial institution from which it had discounted the bills receivable.
Journal Entry for Contingent Liability
Contingent Liability A/c Dr. 2500
To Bank A/c 2500
Surrendered Joint Life Policy
A joint life policy is a type of insurance policy that covers two people under a single policy. In the given scenario, the joint life policy was surrendered for Rs 3000. Surrendering a policy means terminating it before its maturity date and receiving the surrender value, which is the amount that the insurance company will return to the policyholder.
Journal Entry for Surrendered Joint Life Policy
Bank A/c Dr. 3000
To Joint Life Policy A/c 30000
Realisation Account Entry
The realisation account is a temporary account that shows the various transactions related to the winding up of a partnership. In the given scenario, the entries for the contingent liability and surrendered joint life policy will be recorded in the realisation account.
The entries will be as follows:
Realisation A/c Dr. 32500
To Contingent Liability A/c 2500
To Joint Life Policy A/c 30000
To Profit and Loss A/c 500
The profit and loss account will be credited with Rs 500, which is the difference between the surrender value of the joint life policy (Rs 3000) and its book value (Rs 2500).
Conclusion
The contingent liability for bills receivable discounted and the surrendered joint life policy will be recorded in the books of accounts through appropriate journal entries. These entries will then be transferred to the realisation account, which will show the various transactions related to the winding up of the partnership.
Contingent Liability for Bills Receivable Discounted
In accounting, a contingent liability refers to a potential future obligation that may or may not occur, depending on certain events. In the given scenario, the contingent liability for bills receivable discounted has materialized to the extent of Rs 2500. This means that the company has now become liable to pay Rs 2500 to the bank or financial institution from which it had discounted the bills receivable.
Journal Entry for Contingent Liability
Contingent Liability A/c Dr. 2500
To Bank A/c 2500
Surrendered Joint Life Policy
A joint life policy is a type of insurance policy that covers two people under a single policy. In the given scenario, the joint life policy was surrendered for Rs 3000. Surrendering a policy means terminating it before its maturity date and receiving the surrender value, which is the amount that the insurance company will return to the policyholder.
Journal Entry for Surrendered Joint Life Policy
Bank A/c Dr. 3000
To Joint Life Policy A/c 30000
Realisation Account Entry
The realisation account is a temporary account that shows the various transactions related to the winding up of a partnership. In the given scenario, the entries for the contingent liability and surrendered joint life policy will be recorded in the realisation account.
The entries will be as follows:
Realisation A/c Dr. 32500
To Contingent Liability A/c 2500
To Joint Life Policy A/c 30000
To Profit and Loss A/c 500
The profit and loss account will be credited with Rs 500, which is the difference between the surrender value of the joint life policy (Rs 3000) and its book value (Rs 2500).
Conclusion
The contingent liability for bills receivable discounted and the surrendered joint life policy will be recorded in the books of accounts through appropriate journal entries. These entries will then be transferred to the realisation account, which will show the various transactions related to the winding up of the partnership.
Community Answer
A contingent liability for bills receivable discounted materialized to...
First joint life policy will be closed and then it will come on cr. side under by cash joint life policy is the joint policy of all partners
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
A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac?
Question Description
A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac?.
A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac?.
Solutions for A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? 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 A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? defined & explained in the simplest way possible. Besides giving the explanation of
A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac?, a detailed solution for A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? has been provided alongside types of A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? theory, EduRev gives you an
ample number of questions to practice A contingent liability for bills receivable discounted materialized to the extent of Rs 2500. Also there was a joint life policy for rs 30000. This was surrendered for Rs 3000. I am not understand with this term and give solution and which side write in realisation ac? 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
|
Follow Us
|
Signup to see your scores
go up
within 7 days!
within 7 days!
Takes less than 10 seconds to signup