Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Dissolution of Partnership Firm

Question:

When a partnership firm is dissolved, final payment made to partners is transferred to:

Options:

Realisation A/c

Partner's Loan A/c

Partner's Current A/c

Bank A/c

Correct Answer:

Bank A/c

Explanation:

The correct answer is option 4- Bank A/c.

When a partnership firm is dissolved, final payment made to partners is transferred to Bank A/c.

When a partnership firm is dissolved, and final payments are made to partners, the payment is actually made from the firm's Bank Account to the partners. After realisation of assets, payment of liabilities and settlement of partner’s loans, the final amount payable to each partner (as per their capital balance) is paid in cash/bank. The Journal Entry for this as follows:
Partner’s Capital A/c   Dr. (Final amount)
         To Bank A/c                  (Final amount)