Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

What is total amount paid to a partner if a partner is paid remuneration and also agreed amount as realisation expenses but realisation expenses came more than the agreed amount, at the time of dissolution of partnership firm?

Options:

Remuneration

Remuneration + Agreed amount of realisation expenses

Remuneration + Actual realisation expenses

Agreed amount of realisation expenses

Correct Answer:

Remuneration + Agreed amount of realisation expenses

Explanation:

The correct answer is option 2- Remuneration + Agreed amount of realisation expenses.

Remuneration & Agreed amount of realisation expenses paid to partner.

The following journal entry is passed for agreed remuneration to such partner who agrees to undertake the dissolution work-
Realisation A/c Dr.
  To Partner’s Capital A/c
(Being remuneration and realisation expenses payable to partner)

* Agreed amount is paid to partner irrespective whether realisation expenses are more or less than the agreed amount.