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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

Option 1: Debited realization account by Rs 400 and credited bank account Rs 400

Option 2: Debited realization account by Rs 900 and credited mohan's capital account Rs 900

Option 3: Debited realization account Rs 500 credited Moahn's capital acccout Rs 400 and bank account Rs 100

Option 4: None of the above


Team Careers360 18th Jan, 2024
Answer (1)
Team Careers360 24th Jan, 2024

Correct Answer: Debited realization account by Rs 900 and credited mohan's capital account Rs 900


Solution : Answer = Debited realization account by Rs 900 and credited Mohan's capital account Rs 900

Realisation A/C Dr          900
To Mohan's Capital A/C         900
[for Commission]

Realisation expenses were paid by the partner then no journal entry will be passed in the firm's book.
Hence, the correct option is 2.

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