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Question : At the time of the dissolution of the partnership firm. The amount of the Employees Provident Fund shown on the liabilities side of the balance sheet is transferred to

Option 1: Cash account

Option 2: partner's capital account

Option 3: realization account

Option 4: None of the above


Team Careers360 12th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: realization account


Solution : Answer = realization account.

In case of dissolution of a partnership firm, Firstly EPF transferred the credit side of the realisation account and then paid.[treated as outsiders liabilities]

(i) Transferred entry
E.P fund a/c....Dr
To Realisation a/c
(ii) Paid entry
Realisation a/c.....Dr
To Bank a/c
Hence, the correct option is 3.

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