Question : Adiraj and Karan were partners in a firm sharing profits and losses in the ratio 3: 2. On 31st March 2018 the firm was dissolved. After the transfer of assets (other than cash in hand and at the bank) and third-party liabilities to the Realization Account, the following information was provided:
Question:
A bill receivable of Rs. 3,000 under discount was dishonoured as the acceptor had become insolvent and hence the bill had to be met by the firm. The Journal entry will be
Option 1: Bill receivable account debited and bank account credited Rs 3,000
Option 2: Realisation account debited Rs 3,000 and credited B/R account Rs 3,000
Option 3: Realisation account debited Rs 3,000 and credited bank account Rs 3,000
Option 4: None of the above
Correct Answer: Realisation account debited Rs 3,000 and credited bank account Rs 3,000
Solution : Answer = Realization account debited Rs 3000 and credited bank account Rs 3000
When BIR under-discounted and dishonoured as an acceptor became insolvent, the Bill had to be met by the firm.
Realisation Alc Dr. 3000
To Bank A/c 3000
Hence, the correct option is 3.
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