Question : A debtor of Rs 31,000 agreed to pay the dissolution expenses which were Rs 30,000 in full settlement of his debt. Choose the correct option.
Option 1: debited cash account Rs 31,000 and credited realization account Rs 31,000
Option 2: debited realization account rs 30,000 and credited bank account rs 30,000
Option 3: No entry required
Option 4: debited cash account Rs 1000 and credited realization account Rs 1000
Correct Answer: No entry required
Solution : Answer = No entry required Reason:- When realisation expenses of Rs 30,000 were paid through transferring assets(Debtor) then no entry is passed. Realisation a/c Dr(Realisation expenses) To Realisation(Debtors) (OR) No entry Hence, the correct option is 3.
Question : Half of the Trade Creditors valued Rs 40,000 accepted Plant and Machinery at 10% less than the book value and Cash of Rs. 5,000 in full settlement of their claims. The remaining Trade Creditors were paid at a discount of 10%. The entry will be
Question : Jeev, a partner, agreed to do the work of dissolution for which he was allowed a commission of Rs. 10,000. He agreed to bear the dissolution expenses. Actual dissolution expenses paid by Jeev were Rs. 12,000.These expenses were paid by Jeev by drawing cash from the firm. The
Question : Realization expenses were to be borne by A for which he is to get a credit of Rs. 10,000. Actual realization expenses paid out of the firm Bank Account amounted to Rs. 12,000. Choose the correct Journal entry for the treatment of realization expenses.
Question : Mohan and Kanwar are partners in a firm. Their firm was dissolved on 1.1.2013. Mohan was assigned the work of dissolution. For this work Mohan was to be paid Rs.500. Mohan paid dissolution expenses of Rs.400 from his own pocket. Choose the correct Journal entry
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