PARTNERSHIP DISSOLUTION  It causes gain on realization

QUIZ
 It is loss for the partner

1. Retirement and death of a partner:

 is dissoluton of a firm
 may or may not be a dissolution of
partnership
8. Loss on realization is distributed among
agreement
partners:
 is dissolution of partnership agreement
 According to income sharing ratio
 According to capital ratio
2. If all the partners, but one are insolvent it is:
 As decided among them

  Dissolution of an agreement
9. Loss on realization is:
  Dissolution of a firm  Debited to partners capital account
 Credited to partners capital account
  May or may not cause dissolution
 Debited to realization account
3. If all the partners, but one, are solvent it is:
10. When all the partners are insolvent accounts
 Dissolution of partnership agreement payable will be:
 dissolution of a firm  Paid fully
 may or may not cause dissolution  Paid rateably
 Taken over by partner
4. At the time of dissolution:

 all the assets are transferred to realization

account
 Only current assets are transfered to realization
Account.
 Non-cash assets are tranferred to
realization account

5. At the time of dissolution non-cash assets are

credited with:

 Market value
 Book value
 As the agreed amount among
partners

6. If a partner takes over an asset of the firm,

his capital account:
 will be debited with the amount as agreed
 will be credited with the market value of
the asset
 will be debited with book value of asset

7. If a liability is settled at higher value than shown

on the balance sheet and a partner takes the
responsibility to pay that:
 It causes a loss of realization