Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

At the time of dissolution of the partnership firm, there was an outstanding bill for repairs which is not recorded in the books and it had to be paid for ₹2,000. What will be the journal entry for this?

Options:

Realisation A/c Dr.      ₹2000
   To O/s Expenses A/c           ₹2000
(Expenses paid)

Realisation A/c     Dr.       ₹2000
   To Partner's capital A/c            ₹2000
(Expenses paid)

No entry passed

Realisation A/c Dr. ₹2000
   To Bank A/c                 ₹2000
(Expenses paid)

Correct Answer:

Realisation A/c Dr. ₹2000
   To Bank A/c                 ₹2000
(Expenses paid)

Explanation:

For settlement of any unrecorded liability-
Realisation A/c Dr.
   To Bank A/c
(Expenses paid)