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Home Questions 4837N6CHW8
Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

A computer of Book Value of ₹60,000 was taken over by a creditor of ₹40,000 in full settlement. Journal entry will be................

Options:

Realisation A/C Dr ₹60,000
      To Bank A/C   ₹60,000

Realisation A/C Dr ₹40,000
     To Bank A/C   ₹40,000

Creditor's A/C Dr.  ₹60,000
        To Asset A/C  ₹60,000

No Journal Entry

Correct Answer:

No Journal Entry

Explanation:

For settlement with the creditor through transfer of assets when a creditor accepts an asset in full and final settlement of his account, no journal entry needs to be recorded. But, if the creditor accepts an asset only as part payment of his/her dues, the entry will be made for cash payment only.

CUET Questions