Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

What will be the journal entry for transferring the debit balance of current account to capital account at the time of dissolution of partnership firm?

Options:

Partner Capital A/c Dr.
   To Partner’s Current A/c
(Transferring balance of current account to capital account)

Partner Current A/c Dr.
     To Partner’s Capital A/c
(Transferring balance of current account to capital account)

Partner Current A/c Dr.
     To Partner’s fixed Capital A/c
(Transferring balance of current account to capital account)

None of these

Correct Answer:

Partner Capital A/c Dr.
   To Partner’s Current A/c
(Transferring balance of current account to capital account)

Explanation:

Debit balance of current account makes the capital account of partner reduce to that amount of current account.