Doubts

SOLUTION Provisions against assets are credited to Realisation A/c.

SOLUTION Assets against which provisions exist are transferred to Realisation Account at gross value.

SOLUTION Yes, it is transferred to Realisation Account because it is an outside liability.

SOLUTION No, it is not transferred to Realisation Account because its payment is made after the payment of all outside liabilities.

SOLUTION When a liability is to be discharged by a partner, his Capital Account is credited because the claim of the partner against the firm is increased by the amount…

SOLUTION When an asset is taken over by a partner, his Capital Account is debited because the claim of Capital Account is reduced by the value of the asset taken…

SOLUTION Partner’s Capital A/c     Dr.       6,000 To Realisation A/c                             6,000

SOLUTION In case of dissolution of a partnership (i.e., reconstitution of a firm) the firm continues, while in case of dissolution of a firm, its business is discontinued.

SOLUTION Change in Profit Sharing Ratio amounts to Dissolution of partnership and not dissolution of firm as the existing agreement comes to an end and the firm continues under the…