Dissolution Of Partnership Firm — Flashcards

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Dissolution of a partnership firm means the complete closure of the business, where all assets are sold, liabilities are paid off, and the partnership relationship among all partners comes to an end.

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Dissolution of partnership refers to a change in the relationship between partners (e.g., due to retirement or death), but the firm may continue. Dissolution of partnership firm means the firm itself …

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A Realisation Account is a special account prepared during the dissolution of a firm to record the sale of assets, payment of liabilities, and any profit or loss arising from the process. It helps in …

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A Realisation Account is opened to transfer all assets (except cash/bank) and external liabilities at their book values, record the actual amounts realised and paid, and calculate any profit or loss o…

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The following are not transferred to the Realisation Account: (1) Cash in hand and cash at bank, (2) Undistributed losses (debit balance of Profit & Loss A/c), (3) Fictitious assets like preliminary e…

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Undistributed profits or reserves (like General Reserve or credit balance of Profit & Loss A/c) are transferred to the Partners' Capital Accounts in their profit-sharing ratio. No entry is made in the…

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Accumulated losses (debit balance of Profit & Loss A/c) are transferred to the Partners' Capital Accounts in their profit-sharing ratio. This reduces their capital balances.

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No, partners' loans are not transferred to the Realisation Account. They are treated separately and settled directly through the Bank Account or Partners' Capital Accounts.