CUET Preparation Today
| Read the following information and answer the questions that follow: Raina and Meena were partners in a firm sharing profits and losses equally. They dissolved their firm on 31st March, 2018. On this date, the Balance Sheet of the firm, apart from realizable assets and outside liabilities showed the following: ₹ Raina’s Capital 40,000 (Dr.) Meena’s Capital 20,000 (Dr.) Profit & Loss Account 10,000 (Dr.) Raina’s loan to the firm 15,000 Contingency Reserve 7,000 On the date of dissolution of the firm: (a) Raina’s loan was repaid by the firm along with interest of ₹ 500. (b) The dissolution expenses of ₹ 1,000 were paid by the firm on behalf of Raina who had to bear these expenses. (c) An unrecorded asset of ₹ 2,000 was taken over by Meena while Raina discharged an unrecorded liability of ₹ 3,000. (d) The dissolution resulted in a loss of ₹ 60,000 from the realization of assets and settlement of liabilities. |
| The contingency fund will be debited or credited to which account? |
Partners’ Capital Account Realisation Account Profit and Loss Account None of the above |
| Partners’ Capital Account |
| Contingency fund will be credited to Partners’ Capital Account in the profit sharing ratio. |
