Question : Assertion (A): A loan from a relative of a partner is an external liability.
Reason (R): It is not transferred to the Realisation Account.
Option 1: Assertion (A) and Reason (R) are correct but the reason (R) is not the correct explanation of Assertion (A)
Option 2: Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
Option 3: Assertion (A) is correct but the Reason (R) is not correct.
Option 4: Both Assertion (A) and Reason (R) are not correct.
Correct Answer: Assertion (A) is correct but the Reason (R) is not correct.
Solution : Partner's wife loan is credited to Realization a/c and paid as part of outside responsibility. Since Partner's Loan Account is not an external debt, it is not transferred to Realization Account. A new loan is opened for a different partner. Partner's loan is only repaid if there is any surplus after paying off external obligations.
Hence the correct answer is option 3.
Question : Assertion (A): The partner’s Private Property can be applied to pay the firm’s debt.
Reason (R): In a partnership firm, partners have unlimited liability.
Question : Assertion (A): Balance at Banks is transferred to Realisation Account.
Reason (R): Balance at Bank is not to be realised but instead distributed in its present form.
Question : Assertion (A): Dissolution of the firm means the dissolution of the partnership between all the partners of the firm.
Reason (R): Dissolution of the firm means the closure of business and therefore means dissolution of
Question : Assertion (A) Currency held by the public is a monetary liability of the central bank.
Reason (R) Central bank controls credit, whereas commercial banks create credit with the currency held by the public.
Question : Assertion A:- The term; Financial Analysis includes both; Analysis; and Interpretation, Analysis is concerned with the simplification of financial data given in the financial statements by proper classification. Interpretation is concerned with explaining the meaning
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile