Class 12 Accountancy 1 Mark Questions Chapter 5 Dissolution of a Partnership Firm

One Mark Questions for Class 12 Accountancy Chapter 5 Dissolution of a Partnership Firm

Question 1.
Differentiate between Dissolution of Partnership and Dissolution of a Partnership Firm on the basis of ‘Court’s Intervention’. (CBSE Delhi 2019)
Answer:

Question 2.
State any two situations when a partnership firm can be compulsorily dissolved. (CBSE Delhi 2019)
Answer:
A firm is compulsorily dissolved in the following cases: (Any two)

1. When all the partners or all but one partner become insolvent.
2. When the business of the firm becomes illegal.

Question 3.
Distinguish between ‘Reconstitution of Partnership’ and ‘Dissolution of Partnership Firm’ on the basis of ‘Closure of books’.
Answer:

Question 4.
State the basis of calculating the amount of profit payable to the legal representative of a deceased partner in the year of death. (CBSE Outside Delhi 2019)
Answer:
Profit may be estimated

• On the basis of last year’s the profit/Average profits of last given no. of years
• On the basis of Turnover/Sales.

Question 5.
State any two grounds on the basis of which the court may order for the dissolution of the partnership firm. (CBSE Outside Delhi 2019)
Answer:
At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds:

• when a partner becomes insane;
• when a partner becomes permanently incapable of performing his duties as a partner.

Question 6.
State any two situations when a partnership firm can be compulsorily dissolved. (CBSE Outside Delhi 2019)
Answer:
A firm is compulsorily dissolved in the following-cases:

• When all the partners or all but one partner become insolvent.
• When the business of the firm becomes illegal.

Question 7.
State any two contingencies that may result into dissolution of a partnership firm.(CBSE Outside Delhi 2019)
Answer:
Contingencies that may result into dissolution of a partnership firm:

• If the firm is constituted for a fixed term, on the expiry of that term
• If constituted to carry out one or more ventures, on the completion of the venture.

Question 8.
State the order of payment of the following, in case of dissolution of the partnership firm.
(i) to each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e. partner’ loan);
(ii) to each partner proportionately what is due to him on account of capital; and
(iii) for the debts of the firm to the third parties; (CBSE Sample Paper 2019-20)
Answer:
(iii) for the debts of the firm to the third parties;
(i) to each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e. partner’ loan);
(ii) to each partner proportionately what is due to him on account of capital

Question 9.
A and B are partners in a firm sharing profits in the ratio of 3 : 2 Mrs. B has given a loan of ₹ 40,000 to the firm and A has also given a loan of ₹ 80,000 to the firm. The firm was dissolved and its assets realised ₹ 60,000.
State the order of payment of Mrs. B’s loan and A’s loan assuming that there was no other third party liability – of the firm.
Answer:
Order of payment:
First, the third party loan i.e. Mrs. B’s loan will be paid.
The Partner’s loan i.e. A’s loan will be paid.

Question 10.
A B and C are partners in a firm. On April 1, 2013, A and B were declared insolvent by a court. Will the partnership firm be treated as dissolved?
Answer:
Yes.

Question 11.
Mohan and Kanwar are partners in a firm. Their firm was dissolved on 1.1.2013. Mohan was assigned the work of dissolution. For this work, Mohan was paid ₹ 500. Mohan paid dissolution expenses of ₹ 400 from his own pocket. Will any Journal Entry be passed for ₹ 400 paid by Mohan?
Answer:
No.

Question 12.
A firm has investment fluctuation fund of ₹ 10,000. It does not have investments on its Balance Sheet at the time of its dissolution. In which account(s), amount of investments fluctuation fund be transferred?
Answer:
In Partners’ Capital Accounts.

Question 13.
Why is cash balance not transferred to Realisation Account on the dissolution of a partnership firm?
Answer:
Cash is a liquid asset.

Question 14.
A firm was dissolved on April 1, 2013. The assets side of its Balance Sheet has furniture of ₹ 2,500 whereas on the liabilities side, creditors appeared for ₹ 4,000.-Half of the creditors took half of the furniture at 10% discount and the remaining creditors were paid at 10% premium. What journal entries are required?
Answer:
No journal entry will be passed for the first half of the creditors but for the remaining creditors, entry will be:

Question 15.
Should intangible assets be treated in the manner of treatment of tangible assets at the time of dissolution of a partnership firm?
Answer:
Yes.

Question 16.
In case of dissolution of a firm which liabilities are to be paid first?(CBSE 2011 Compartment Delhi)
Answer:
Debts of third parties.

Question 17.
In case of dissolution of a firm, which item on the liabilities side is to be paid last? (CBSE 2011 Compartment Delhi)
Answer:
Partners’ capital.

Question 18.
A firm has furniture of₹ 6,000 which was taken over by a creditor of₹ 5,000 in full settlement of his claim. Mention whether any journal entry will be passed for this. If yes, pass the journal entry.
Answer:
No, journal entry will be passed.

Question 19.
Creditors of ₹ 50,000 took over stock at agreed value of₹ 45,000 and balance Was paid to him. Pass the journal entry for this transaction.
Answer:
The Journal entry will be:

Question 20.
Drawers of bills payable ₹ 25,000 took over furniture at agreed value of₹ 29,000 and paid the excess value. Pass journal entry for this transaction.
Answer:
The Journal entry will be:

Question 21.
Land and Building (book value) ₹ 1,60,000 sold for ₹ 3,00,000 through a broker who charged 2% commission on the deal. Journalise the transaction, at the time of dissolution of the firm. (CBSE Sample Paper 2018-19)
Answer:

Question 22.
State any one occasion for the dissolution of the firm on court’s orders when a partner becomes. (Compt. Delhi 2017)
Answer:
Partner becomes permanently incapable of performing his duties as a partner.

Question 23.
Name the asset that is not transferred to the debit side of Realisation account, but brings certain amount of cash against its disposal at the time of dissolution of the firm. (CBSE Delhi 2014)
Answer:
Unrecorded assets

Question 24.
Ram and Shyam formed partnership at will. Ram gave a notice on January 1, 2013 to dissolve the firm. Can partnership firm be dissolved even without consent of Shyam? Give reason.
Answer:
Yes.