NCERT Class 12 Accountancy MCQ Chapter 4 Dissolution of Partnership Firm Solutions, AHSEC Class 12 Accountancy Multiple Choice Question Answer to each chapter is provided in the list so that you can easily browse throughout different chapters NCERT Class 12 Accountancy MCQ Chapter 4 Dissolution of Partnership Firm Question Answer and select needs one.
NCERT Class 12 Accountancy MCQ Chapter 4 Dissolution of Partnership Firm
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Dissolution of Partnership Firm
Chapter: 4
| PART – Ⅰ |
MULTIPLE CHOICE QUESTION ANSWER
1. According to the Partnership Act of 1932, what does Section 39 define?
(i) Admission of a new partner.
(ii) Retirement of a partner.
(iii) Dissolution of a firm.
(iv) Reconstitution of a partnership firm.
Ans: (iii) Dissolution of a firm.
2. Which of the following statements is correct?
(i) Reconstitution dissolves the firm completely.
(ii) Reconstitution only changes the agreement but keeps the firm intact.
(iii) Dissolution allows the firm to continue indefinitely.
(iv) Dissolution and reconstitution mean the same thing.
Ans: (ii) Reconstitution only changes the agreement but keeps the firm intact.
3. When can a firm be dissolved “by notice”?
(i) In a partnership with a fixed term.
(ii) Only with the consent of all partners.
(iii) In a partnership at will.
(iv) When all partners become insolvent.
Ans: (iii) In a partnership at will.
4. At the dime of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :
(i) Realisation Account.
(ii) Creditors’ Account.
(iii) Partners’ Capital Accounts.
(iv) Profit & Loss Account.
Ans: (iii) Partners’ Capital Accounts.
5. In the event of dissolution of partnership firm, the provision for doubtful debts is transferred to:
(i) Realisation Account.
(ii) Partners’ Capital Accounts.
(iii) Sundry Debtors Account.
(iv) None of the above.
Ans: (i) Realisation Account.
6. On dissolution, if a partner undertakes to make payment of a liability of the firm, the account to be debited is:
(i) Profit & Loss Account.
(ii) Realisation Account.
(iii) Partner’s Capital Account.
(iv) Cash Account.
Ans: (ii) Realisation Account.
7. Which of the following is a reason for compulsory dissolution of a firm?
(i) Completion of a venture.
(ii) Death of a partner.
(iii) Business becoming illegal.
(iv) Expiry of a fixed term.
Ans: (iii) Business becoming illegal.
8. In a partnership at will, how can a firm be dissolved?
(i) Through a court order.
(ii) By compulsory dissolution.
(iii) By a partner giving notice in writing.
(iv) By completion of a specific venture.
Ans: (iii) By a partner giving notice in writing.
9. Which of the following is a ground for dissolution by court?
(i) The partners unanimously agree to dissolve the firm.
(ii) A partner becomes permanently incapable of performing duties.
(iii) A partner dies.
(iv) A partner gives notice of dissolution.
Ans: (ii) A partner becomes permanently incapable of performing duties.
10. Under which type of dissolution can a firm be dissolved with the consent of all partners?
(i) Compulsory Dissolution.
(ii) Dissolution by Agreement.
(iii) Dissolution by Notice.
(iv) Dissolution by Court.
Ans: (ii) Dissolution by Agreement.
11. What happens to the books of account upon the dissolution of a firm?
(i) They are left open for future transactions.
(ii) They are closed as the business ends.
(iii) They remain open for auditing purposes.
(iv) They are only partially closed.
Ans: (ii) They are closed as the business ends.
12. Partner A’s capital account shows a deficiency of ₹10,000 during the dissolution of a firm. According to the agreement, the deficiency will be shared equally among the remaining partners, B and C. How much will each partner contribute?
(i) ₹10,000 each.
(ii) ₹5,000 each.
(iii) ₹10,000 in total, divided equally.
(iv) No contribution is required.
Ans: (ii) ₹5,000 each.
13. In the settlement of accounts upon dissolution, how are losses handled according to Section 48 of the Partnership Act 1932?
(i) Only out of capital.
(ii) First out of profits, then out of capital, and lastly by the partners individually in their profit-sharing ratio.
(iii) Only by partners individually.
(iv) Only out of assets.
Ans: (ii) First out of profits, then out of capital, and lastly by the partners individually in their profit-sharing ratio.
14. Which of the following is the correct order of applying the firm’s assets according to the Partnership Act?
(i) Paying partners for capital first, then third-party debts.
(ii) Paying third-party debts first, then partner loans, then partner capital, and lastly dividing the residue.
(iii) Dividing assets equally among partners before paying any debts.
(iv) Paying only external creditors.
Ans: (ii) Paying third-party debts first, then partner loans, then partner capital, and lastly dividing the residue.
15. Upon dissolution, the firm has ₹50,000 in assets, a loan from Partner D worth ₹15,000, and third-party creditors worth ₹30,000. How will the assets be utilized?
(i) Pay Partner D first, then creditors.
(ii) Pay creditors first, then Partner D.
(iii) Pay both creditors and Partner D equally.
(iv) Divide equally among all partners.
Ans: (ii) Pay creditors first, then Partner D.
