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Home Questions PR7KKB7FRP
Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

P and Q were sharing profit and losses in the 3:2. They decided to dissolve the partnership. There was a Deferred Advertisement Expenditure A/C appeared in the books at Rs 30,000. Journal Entry will be-

Options:

Advertisement Expenditure A/C Dr ₹30,000
    To Realisation A/C ₹30,000
(Distribution of advertisement expenditure)

Realisation A/C Dr ₹30,000
    To Advertisement Expenditure A/C ₹30,000
(Distribution of advertisement expenditure)

Advertisement Expenditure A/c Dr  ₹30,000
   To P's Capital A/C ₹18,000
   To Q's Capital A/C ₹12,000
(Distribution of advertisement expenditure)

P's Capital A/C Dr  ₹18,000
Q's Capital A/C Dr  ₹12,000
   To Advertisement Expenditure A/C ₹30,000
(Distribution of advertisement expenditure)

Correct Answer:

P's Capital A/C Dr  ₹18,000
Q's Capital A/C Dr  ₹12,000
   To Advertisement Expenditure A/C ₹30,000
(Distribution of advertisement expenditure)

Explanation:

Deferred Expenditure will be debited to partner's capital a/c.
30,000*3/5 = 18,000 - P
30,000 * 2/5 = 12,000 - Q

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