Question : There was a contingent liability of Rs. 37,000 in respect of bills discounted but not matured. All the discounted bills were honoured but an acceptor of a bill of Rs. 5,000 became insolvent and fifty paise in a rupee was received. The liability of the firm on account of this bill discounted and dishonoured has not so far been recorded. The entry will be .
Option 1: Realization account debited Rs 5,000 and credited bank account Rs 5,000
Option 2: Bank account debited with Rs 2,500 and credited realization account Rs 2,500
Option 3: Both 1 and 2
Option 4: None of these
Correct Answer: Both 1 and 2
Solution : Answer = Both 1 and 2
When BIR was discounted and dishonoured, Hence the bill had to be met by the firm. Realisation AIC Dr. 5,000 To Bank AC. 5000 [for the Payment of Bill] Bank A/C Dr. 2500 To Realisation. A/c. 2500 [for 50% Received from his Estate] 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 : Realization expenses of Rs. 5,000 were to be borne by Pavit, a partner. However, it was paid by Hitesh, another partner. It was to be recorded in the books. The entry will be
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
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.
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