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Dissolution of a Partnership Firm
On dissolution, how will you deal with partner’s loan if it appe...

On dissolution, how will you deal with p | Class 12 Accountancy Chapter Dissolution of a Partnership Firm, Dissolution of a Partnership Firm NCERT Solutions

Welcome to the NCERT Solutions for Class 12 Accountancy - Chapter Dissolution of a Partnership Firm. This page offers a step-by-step solution to the specific question from Exercise 1, Question 3: . With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.

Question 3:

On dissolution, how will you deal with partner’s loan if it appears on the
(a) assets side of the balance sheet, (b) liabilities side of balance sheet.

Answer:

(a) When loan amount is shown in the assets side of the balance sheet, it
indicate that the loan has been granted by the firm to the partner. In that case, at the time of dissolution the amount of loan will be transferred to the concerned
partner’s capital account. The following Journal Entry will be passed:

Partners Capital A/c. Dr.
To Partners Loan A/c

(Being partners loan amount is transferred to partners capital account)

(b) When the amount of loan appears in the liabilities side of the balance sheet, it indicate that the respective partner or partners have given loan to the firm. In this case, partner’s loan will be paid off after paying all the external liabilities first.
Here, it is worth mentioning that the partner’s loan will not be transferred to the
realisation account, in fact, it will be paid in cash. The following accounting entry will be passed in this regard:

Partners Loan A/c. Dr.

To Cash/Bank A/c

(Being loan taken from partner is paid in cash)

Other Questions of Chapter Dissolution of a Partnership Firm

Reproduce the format of Realisation Account.

State the order of settlement of accounts on dissolution.

How deficiency of crditors is paid off at the time of dissolution of firm.

Explain the process dissolution of partnership firm?

Distinguish between firm’s debts and partner’s private debts.

State the difference between dissolution of partnership and dissolution of partnership firm.

On what account realisation account differs from revaluation account.

What is a Realisation Account?

State the accounting treatment at the time of dissolution of a firm for:
i. Unrecorded assets ii. Unrecorded liabilities

Popular questions of class 12 Accountancy

What is Capital Fund? How is it calculated?

What is sacrificing ratio? Why is it calculated?

If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?

Why there is need for the revaluation of assets and liabilities on the admission of a partner?

What is subscription? How is it calculated?

List the items which may be debited or credited in capital accounts of the partners when:

(i) Capitals are fixed.
(ii) Capital are fluctuating.

Why is Profit and Loss Adjustment Account prepared? Explain.

If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?

Why it is considered desirable to make the partnership agreement in writing.

On what occasions sacrificing ratio is used?

Recently Viewed Questions of Class 12 Accountancy

Illustrate how interest on drawings will be calculated under various situations.

What is Capital Fund? How is it calculated?

What are the different ways in which a partner can retire from the firm?

Give two circumstances under which the fixed capitals of partners may change.

Why it is considered desirable to make the partnership agreement in writing.

List the items which may be debited or credited in capital accounts of the partners when:

(i) Capitals are fixed.
(ii) Capital are fluctuating.

Write the various matters that need adjustments at the time of retirement of partner/partners.

Rani and Suman are in partnership with fixed capitals of Rs, 80,000 and Rs.60,000, respectively. During the year 2015-16, Rani withdrew Rs. 10,000 from her capital and Suman Rs. 15,000. Profits before charging interest on capital was Rs. 50,000. Rani and Suman shared profits in the ratio of 3:2. Calculate the amounts of interest on their capitals @ 12% p.a. for the year ended March 31, 2016.

Identify various matters that need adjustments at the time of admission of a new partner.

If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?

Study Tips for Answering NCERT Questions:

NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:

Read the question carefully and focus on the core concept being asked.
Reference examples and data from the chapter when answering questions about Dissolution of a Partnership Firm.
Review previous year question papers to get an idea of how such questions may be framed in exams.
Practice answering questions within the time limit to improve your speed and accuracy.
Discuss your answers with your teachers or peers to get feedback and improve your understanding.

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