Tag: book keeping and accountancy

Questions Related to book keeping and accountancy

Application to court for dissolution of a firm can be made :

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Where the partnership is at will

  2. Where the partnership is not at will

  3. Where is the partnership is for a fixed duration

  4. In all cases

Show answer
Correct Option: B
Explanation:

When the partnership is not at will dissolution can be made by application to court. Any partner can file a suit in the court for dissolution. Where the partnership is at will partner in a partnership can dissolve the firm by giving notice of dissolution to other parties. Where the partnership is for a fixed period, the partnership comes to an end on a date specified in partnership deed.

_________ is created to provide funds for payment to the legal heir of the deceased partner.

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Sinking fund

  2. Joint life policy

  3. Invest in mutual fund

  4. Fixed deposit in banks

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Correct Option: B

Dissolution of partnership between all the partners of the firm is called __________.

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Dissolution of the firm

  2. Dissolution of partnership

  3. Winding up of firm

  4. Termination of firm

Show answer
Correct Option: A
Explanation:

Dissolution of partnership is different from dissolution of firm. Dissolution between partners does not lead to dissolution of firm. But if dissolution is between all the partners of a firm then it leads to dissolution of firm because if there are no partners to work then firm will automatically get dissolved. For partnership minimum two persons are required. If there are no partners then there is no partnership firm. 

Under the Partnership Act, on which of these grounds a partner of a firm may sue for dissolution of the firm :

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Insanity of a partner

  2. Misconduct of a partner

  3. In both the cases

  4. Marriage of any partner

Show answer
Correct Option: C
Explanation:

Dissolution of the firm by the court can be done in both the cases when there is insanity of a partner or if a partner misconduct according to Section 44 of the Indian Partnership Act. Section 44 provides the various grounds for dissolution of firm by court.

Which of the following will result in dissolution of firm?

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Retirement

  2. Death

  3. Explusion

  4. Dissolution

Show answer
Correct Option: D
Explanation:

Retirement, Death, Expulsion does not result in dissolution of firm. It only result in dissolution of partnership. Remaining partners can still agree to continue the business of partnership firm. But dissolution of firm resulted in a complete closure of business. All the assets are sold and liabilities are paid and business ceases to exist.

According to the Partnership Act, which of this statement about the dissolution of the partnership is true.

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Dissolution of partnership is called dissolution of the firm

  2. Dissolution between the two partners is called the dissolution of the firm

  3. On the completion of the venture of the firm is called the dissolution of the firm

  4. Dissolution between all the partners of a firm is called dissolution of the firm

Show answer
Correct Option: D
Explanation:

Dissolution of partnership is different from dissolution of firm. Dissolution between partners does not lead to dissolution of firm. But if dissolution is between all the partners of a firm then it leads to dissolution of firm because if there are no partners to work then firm will automatically get dissolved. No firm can work without partners. For partnership minimum two persons are required. If there are no partners then there is no partnership firm. 

Under section $44$ of the Partnership Act, a firm may be dissolved on happening of certain contingencies like :

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Insanity of a partner

  2. Marriage of a partner

  3. By retirement of a partner

  4. Partner joining political parties

Show answer
Correct Option: A
Explanation:

Marriage of a partner does not affect the working of partnership. Retirement and a partner joining political parties can also not be a ground for dissolution because remaining partner can continue the business of partnership. But According to Section 44 of Indian Partnership Act, When a partner becomes of unsound mind and is unable to continue further then the court may order for dissolution of firm. Insanity can be ground for dissolution.  

Non-registration of firm does not effect :

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Right to sue for dissolution

  2. Right to sue any partner

  3. Right to claim for set-off

  4. All the three

Show answer
Correct Option: A
Explanation:

Registration of partnership is not compulsory under law. If partnership firm is not registered, it can not enforce its claims against a third party in the court of law. Partner of non - registered firm can not file a suit against other partner. But if there exist a just and equitable cause for dissolution, partners can file a suit for dissolution in court.

A and B were partners in a joint venture sharing profits and losses in the proportion of 4/5th and 1/5th respectively. A supplies goods to the value of  50,000 and incurs expenses amounting to 5,400. B supplies goods to the value of 14,000 and his expenses amount to 800, B sells goods at 87,400. B settles his account by bank draft. What will be the profit on venture?

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. 17,200

  2. 17,000

  3. 18,000

  4. 18,200

Show answer
Correct Option: A
Explanation:

                                       Joint Venture Account

 Particulars  Amount  Particulars  Amount
 To A's A/cGoods: 50000Expenses: 5400  55400  By B's A/c (sales)  87400
 To B's A/cGoods: 14000Expenses: 800  14800    
 To Profit A- 13760B- 3440  17200    
 Total  87400 Total   87400

                                                

It is uncommon to find for realization account :

book keeping and accountancy dissolution of firm accounting record at the time of dissolution procedure of settlement of accounts partnership account (dissolution of partnership)

  1. Prepared at the time of dissolution of firm.

  2. Contains generally all assets and liabilities.

  3. Records the sale of various assets and payment of liabilities.

  4. None of the above.

Show answer
Correct Option: D
Explanation:

Dissolution of partnership firm means that the firm closes down its business and comes to an end. A realization account is opened. In this all the assets and liabilities are transferred. It records the sale of assets and payment of liabilities because the main object of this account is to calculate the profit or loss on sale of such assets and payment of liabilities.