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Class 12AccountancyDissolution of a Partnership FirmClosing the BusinessEasy
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At the time of dissolution of a firm, to which account are non-cash assets transferred?

Answer and explanation

Correct answer: Realisation Account

At dissolution, non-cash assets such as land, machinery and stock are transferred to the Realisation Account at their book values. This account is used to determine the profit or loss arising from the sale of assets and settlement of liabilities. Cash or bank balances are not transferred to the Realisation Account; this is an important examination point.

Related tags

Partnership DissolutionRealisation AccountNon-Cash AssetsClosing The BusinessAccountancy Class 12Dissolution Of A Partnership FirmAccountancyClass 12 Mcq
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10 more MCQs
  1. 1What is the process of permanently closing a partnership firm and ending its existence called?
  2. 2Which account is prepared at the time of dissolution of a firm to determine the profit or loss arising from the settlement of its assets and external liabilities?
  3. 3What is generally done with the assets of a partnership firm at the time of its dissolution?
  4. 4On dissolution of a partnership firm, from what are the external liabilities generally paid?
  5. 5To which account is the realisation profit transferred?
  6. 6To which account is the realisation loss transferred?
  7. 7What happens to the existence of the firm after dissolution?
  8. 8Dissolution expenses are generally debited to which account?
  9. 9At the time of dissolution, if an asset is sold for ₹10,000, what amount will be credited to the Realisation Account?
  10. 10On dissolution of a firm, to whom is the final cash balance paid after settling outside liabilities and other amounts due?
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