Match List-I with List-II. LIST I (Accounting standards Section of Ac…

Match List-I with List-II.

LIST I (Accounting standards Section of Act.)	LIST II (Issues)
(A) AS-3	(I) Settlement Of Accounts
(B) AS-26	(II) Firm's debt and private debt
(C) Section 48 of the Indian partnership Act	(III) Cash flow statement
(D) Section 49 of the Indian partnership Act	(IV) Treatment of goodwill

Choose the correct answer from the options given below

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Each standard or section in List-I governs one area of accounts.

(A) AS-3 — this matches (III) Cash flow statement. AS-3 sets out how the cash flow statement is prepared, classifying cash flows into operating, investing and financing activities.

(B) AS-26 — this matches (IV) Treatment of goodwill. AS-26 deals with intangible assets, and its rules on purchased goodwill decide how goodwill is shown and written off.

(C) Section 48 of the Indian partnership Act — this matches (I) Settlement Of Accounts. Section 48 lays down the order of settling accounts on dissolution: losses first out of profits, then assets applied to outside debts, partners’ loans and capitals.

(D) Section 49 of the Indian partnership Act — this matches (II) Firm's debt and private debt. Section 49 decides how firm’s debts and a partner’s private debts are met when both exist.

NCERT (2026-27 edition):
Classification of Activities for the Preparation of Cash Flow Statement – “You know that various activities of an enterprise result into cash flows (inflows or receipts and outflows or payments) which is the subject matter of a cash flow statement. As per AS-3, these activities are to be classified into three categories: (1) operating, (2) investing, and (3) financing activities so as to show separately the cash flows generated (or used) by (in) these activities.”

NCERT (2026-27 edition):
Treatment of Goodwill – “… Accounting Standard 26 implies that: (a) Purchased goodwill may be accounted for in the books and shown as an asset, where it is accounted for in the books and shown as assets, it should be written off as early as possible, but where it is to be written- off in more than one accounting year, it should be written off in a period not exceeding 10 years.”

NCERT (2026-27 edition):
Settlement of Accounts – “In case of dissolution of a firm, the firm ceases to conduct business and has to settle its accounts. For this purpose, it disposes off all its assets for satisfying all the claims against it. In this context it should be noted that, subject to agreement among the partners, the following rules as provided in Section 48 of the Partnership Act 1932 shall apply.”

NCERT (2026-27 edition):
Private Debts and Firm's Debts – “Where both the debts of the firm and private debts of a partner co-exist, the following rules, as stated in Section 49 of the Act, shall apply.”