MCQs for CBSE Class 12 Accountancy Chapter 4: Dissolution of Firm

MCQs for CBSE Class 12 Accountancy Chapter 4: This article provides list of important MCQs for CBSE Class 12 Accountancy Chapter 4. You can also find attached a PDF download link for MCQs of the chapter mentioned in the article. Moreover, links of some important resources for preparation of upcoming CBSE Board Examinations 2024 are present here for your reference.

As per CBSE’s new Exam Pattern, it is important for students to practise MCQ-type questions. They can often come across as tricky questions which can either get you marks or steal them away, within seconds. Here are a few things you should keep in mind while solving MCQ-type questions:

• Choose the option that is nearest or most identical to your answer
• Don’t miss on an answer that is repetitive in multiple options
• Focus on details of the options, this can help you choose between identical answers
• Look for an option that relevantly answers the question
• Observe option that has similar words as present in the question

Related:

CBSE Class 12 Accountancy Syllabus 2023-24 (PDF)

CBSE Class 12 Accountancy Sample Paper 2023-24 (PDF)

Important MCQs for CBSE Class 12 Accountancy Chapter 4 are as follows:

1.Economic relationship among/between partners end at the time of

(a) Admission of a partner/partners

(a) (b) Death of a partner/partners

(c) Retirement of a partner

(d) Dissolution of partnership firm

Answer. (d)Dissolution of partnership firm

2.Section 41 of partnership act 1932 deals with dissolution of a firm 

a) by mutual agreement

b) compulsory dissolution correct

c) by notice

d) by order of court.

Answer. (b) Compulsory dissolution correct

3.Which of the following will be Transferred to Realisation Account?

a) Goodwill appearing in the books at the time of Dissolution of Firm

b) Investment Fluctuation Reserve

c) Provision for Doubtful Debts

d) General Reserve

Choose the Correct Option:

1. D Only
2. A, B, C Only
3. B and C Only
4. A and C Only

Answer. (2) A, B, C only

4.Realization account is opened when:

(a) All the assets of the firm are realised

(b) All the liabilities are paid

(c) Both (a) & (b)

(d) None of these

Answer. (c )Both (a) & (b)

5.Court may order dissolution of partnership firm

a) when a partner has become of unsound mind

b) when a partner is permanently incapacitated

c) when a partner is found guilty of misconduct

d) all of the above.

Answer. (d) All of the above

6.Assertion (A) : Realisation account is prepared at the time of dissolution of partnership.

Reason (R) : Realisation account records the cash release from sale of assets and amount paid to external liabilities.

(A)Both Assertion (A) and Reason (R) are True and Reason (R) is correct explanation of Assertion.

(B) Both Assertion (A) and Reason (R) are True and Reason (R) is not correct explanation of Assertion.

(C) Assertion (A) is true, Reason (R) is false.

(D)Assertion (A) is false, Reason (R) is true.

Answer. (d) Assertion is false, Reason is true

7.On the dissolution of the firm _______ will be debited to realization Account.

(a) Realisation expenses paid by the partner

(b) Balance of reserve fund

(c) Amount of unrecorded assets

(d) Amount of unrecorded liabilities

Answer. (a) Realisation expenses paid by the partner

8.The term Number of years purchase means:

(a) The number of years during which the purchaser of Goodwill expects that the profit due to goodwill are likely to arise in the future.

(b) Number of years in which goodwill is purchased

(c) Number of years for which goodwill purchased will not help the firm in earning similar profits.

(d) None of these

Answer. (a) The number of years during which the purchaser of goodwill expects that the profit due to goodwill are likely to arise in the future.

9.Identify the sequence of application of assets at the time of Dissolution of a Firm:

a) Partner’s Loans and Advances

b) Partner’s Capital

c) Profit among the Partners at their profit sharing Ratio

d) Third Parties such as Creditors and Bank Loan

Choose the correct option:

1. D, C, B and A
2. A, B, C and D
3. D, B, C and A
4. D, A, B and C

Answer.  (4) D, A, B and C

10.At the time of dissolution of partnership an unrecorded asset taken by X a partner is debited to:

a) X capital account

b) realisation account

c) cash account

d) none of the above

Answer. (a) X capital account

11.A and B are partners sharing profits equally. The firm is going to be dissolved. At that time Mrs A has given loan of ₹ 50,000 to the firm @6% interest and simultaneously A has also given loan of ₹ 1,00,000. The assets realized ₹ 10,00,000. Who will be paid first?

(a) Partner A

(b) Partner B

(c) Mrs. A

(d) Partner A and Partner b in their profit-sharing ratio

Answer. (c) Mrs A

12.Assertion (A) : Dissolution expenses paid by the firm on behalf of a partner is recorded on the debit side of realisation account.

Reason (R) : Such expenses are a Non-business expense.

(A)Both Assertion (A) and Reason (R) are True and Reason (R) is correct explanation of Assertion.

(B) Both Assertion (A) and Reason (R) are True and Reason (R) is not correct explanation of Assertion.

(C) Assertion (A) is true, Reason (R) is false.

(D)Assertion (A) is false, Reason (R) is true.

Answer. (d) Assertion is false, Reason is true

13.An unrecorded asset was valued at Rs 100000. On Firm’s dissolution, it was sold for 52%. Realisation Account will be credited with

a) Rs 48000

b) Rs 100000

c) Rs 52000

Answer. (c) Rs 52,000

14. On Firm’s Dissolution, what entry will be Passed on realization of Goodwill which was shown in

Balance sheet?

a) Goodwill A/C----Dr

      To Realisation

b)  Cash A/C-----Dr

      To realisation

c) Goodwill A/C---Dr

         To Cash

Answer. (b) Cash A/C....Dr

                         To realisation

15.In case of dissolution, total creditors of the firm were Rs40,000; creditors worth Rs10000 were given a piece of furniture costing Rs8000 in full and final settlement. Remaining creditors allowed a discount of 10%. What will be the amount with which cash will be credited in the realisation account for payment to creditors:

a) 28,000

b) 27,000

c) 20,000

d) 25,000

Answer. (b) 27,000

To download MCQs for Class 12 Accountancy Chapter 4, click on the link below.

Important resources for CBSE Board Examination(2023-2024)

CBSE Class 12 Syllabus 2023-24 (All Subjects)

CBSE Class 12 Sample Papers 2023-24 (All Subjects)

NCERT Books for Class 12 (All Subjects)

NCERT Solutions for Class 12 (All Subjects)