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Home Questions GPY89W9QHF
Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

Assertion: Revaluation account is prepared at the time of dissolution of the firm.

Reasoning: At the time of dissolution of a firm, capitals of the partners are paid off only if any balance is left with the firm after payment of partners loans.

Options:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

Assertion (A) is true but Reasoning (R) is not correct.

Assertion (A) is not true but Reasoning (R) is correct.

Correct Answer:

Assertion (A) is not true but Reasoning (R) is correct.

Explanation:

Realisation account is prepared at the time of dissolution of the partnership firm not the revaluation account. Revaluation account is prepared at the time of reconstitution of partnership firm.

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