Partner Accounts

Correct answer: A. Debit C's capital and credit bank

Credit capital balance is paid to the partner. Therefore C's capital is debited and bank is credited.

Correct answer: A. Debit realisation and credit partners' capital accounts

To close realisation profit realisation account is debited and partners' capital accounts are credited. Remember this profit transfer entry.

Correct answer: B. Debit partners' capital accounts and credit realisation

Realisation loss reduces partners' capital so capital accounts are debited and realisation is credited. Do not reverse loss transfer in exams.

Correct answer: A. ₹24,000

Realisation profit is distributed among partners in their profit-sharing ratio. A’s share is \(6/(6+5)=6/11\). Therefore, the amount credited to A’s Capital Account is \(₹44,000 \times 6/11 = ₹24,000\). ₹22,000 represents half of the total profit, not A’s share under the 6:5 ratio. Exam tip: add the ratio terms first, then multiply the profit by the required partner’s fraction.

Correct answer: B. ₹18,000

Realisation loss is distributed among partners in their profit-sharing ratio. The total ratio is 4 + 3 + 2 = 9, and the second partner’s share is 3. Therefore, the amount debited to the second partner is ₹54,000 × 3/9 = ₹18,000. Option A is the first partner’s share because that partner has a ratio of 4. Exam tip: Calculate the total ratio first, then multiply the loss by the concerned partner’s ratio divided by the total ratio.

Correct answer: A. Credit ₹66000

At dissolution, a partner’s final capital balance is adjusted for items transferred to that account. A share of realisation profit is credited because it increases the partner’s claim. Drawings are deducted because they have already been withdrawn and reduce the amount payable to the partner.

Starting with A’s credit capital of ₹62,000, add the realisation profit of ₹13,000 and subtract drawings of ₹9,000: ₹62,000 + ₹13,000 − ₹9,000 = ₹66,000. The resulting balance remains a credit balance, meaning ₹66,000 is payable to A, subject to the other settlement entries. Therefore option A is correct.

Correct answer: A. Credit ₹43000

Accumulated loss is deducted and interest on capital is added. ₹48000 minus ₹7500 plus ₹2500 equals ₹43000.

Correct answer: A. ₹28,000

Interest on drawings and C’s share of realisation loss are both debited to C’s Capital Account, so both reduce the amount payable. Therefore, payable amount = ₹35,000 − ₹1,800 − ₹5,200 = ₹28,000. ₹29,800 would result from deducting only the realisation loss. Exam tip: while settling a partner’s capital account on dissolution, subtract debit items and add credit items.

Correct answer: C. When firm directly pays outside liability

Direct payment of outside liability by firm first goes to realisation account and does not directly affect capital. Separate direct and indirect effects in exams.

Correct answer: A. Realisation debit and partner capital credit

Taking over liability closes it in realisation and gives credit to partner. Remember the liability taken over entry in exams.

Correct answer: A. Partner capital debit and realisation credit

When asset is taken over partner's capital is debited and realisation is credited. Remember the direction for asset taken over.

Correct answer: A. First all adjustments then payment or recovery

First adjust all reserves, losses, assets, liabilities and expenses. Then pay or recover according to final balance.

Correct answer: A. ₹33,500

The realisation loss of ₹13,000 is shared equally, so A’s share is ₹6,500. Final capital = Initial capital − A’s share of loss = ₹40,000 − ₹6,500 = ₹33,500. The unchanged amount of ₹40,000 ignores the loss, while adding the loss would be conceptually incorrect. Exam tip: For an equally shared loss, divide the total loss by the number of partners and deduct each partner’s share from their capital.

Correct answer: A. Profit sharing ratio

Realisation profit is shared in profit sharing ratio, equal capital does not change this rule. Keep capital and profit ratio separate in exams.

Correct answer: A. 3:2

Realisation loss is shared in profit ratio, not capital ratio. Choose profit ratio for loss sharing in exams.

Correct answer: A. Fixed capital

Under fixed capital method, fixed capital is generally the base unless stated otherwise. Read the method carefully in exams.

Correct answer: A. Final capital after all adjustments

In fluctuating capital, capital after all normal adjustments becomes the base. Find final capital before deficiency in exams.

Correct answer: A. ₹6,000

Under the Garner v. Murray rule, the deficiency of an insolvent partner is borne by the solvent partners in the ratio of their final capitals. A and B’s final capital ratio is ₹50,000 : ₹25,000 = 2 : 1. Therefore, A’s share is ₹9,000 × 2/3 = ₹6,000. ₹3,000 is B’s share, so the entire deficiency is not borne by A alone. Exam tip: First calculate the solvent partners’ final capital ratio, then distribute the deficiency in that ratio.

Correct answer: A. Because it is capital account deficiency, not realisation account loss

Insolvent partner's deficiency relates to his capital account. Show it separately from realisation loss in exams.

Correct answer: A. Loan first then capital

In payment order partner's loan is paid before return of capital. Keep partner loan and capital separate in exams.

Correct answer: A. ₹12000 loan

After outside liabilities, partner loan is paid before capital. Remember loan priority in exams.

Correct answer: A. All capital accounts close by payment or recovery at the end

After dissolution no balance should remain in capital accounts. Check accuracy through final closing entry in exams.