What is a Realisation Account?
Realization Account is prepared at the time of dissolution of a partnership
firm. This account is prepared to know the profit made or loss incurred at the time of dissolution of a firm. All the assets except cash and bank a/c are transferred to the debit side of realization account and liabilities (not capital accounts) are transferred to the credit side of realization account. When assets are sold 11
cash/bank A/c is debited and Realization A/c credited. On settling the liabilities
Realization A/c is debited and Cash/Bank A/c is credited. In last if total of credit
side exceeds debit side, it means there is profit and that is transferred to partners capital accounts. In case of loss, the partners' capital accounts are debited and Realization A/c credited.
Popular Questions of Class 12 Accountancy
- Q:-
What is Capital Fund? How is it calculated?
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What is sacrificing ratio? Why is it calculated?
- Q:-
If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?
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Why there is need for the revaluation of assets and liabilities on the admission of a partner?
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What is subscription? How is it calculated?
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List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating. - Q:-
Why is Profit and Loss Adjustment Account prepared? Explain.
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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?
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Why it is considered desirable to make the partnership agreement in writing.
- Q:-
On what occasions sacrificing ratio is used?
Recently Viewed Questions of Class 12 Accountancy
- Q:-
State the order of settlement of accounts on dissolution.
- Q:-
How deficiency of crditors is paid off at the time of dissolution of firm.
- Q:-
State the meaning of Income and Expenditure Account.
- Q:-
What is sacrificing ratio? Why is it calculated?
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State the accounting treatment at the time of dissolution of a firm for:
i. Unrecorded assets ii. Unrecorded liabilities - Q:-
State the difference between dissolution of partnership and dissolution of partnership firm.
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State the meaning of ‘Not- for- Profit’ Organisations.
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What is subscription? How is it calculated?
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Give two circumstances under which the fixed capitals of partners may change.
- Q:-
Define Partnership Deed.
- NCERT Chapter