Doubts

SOLUTION No, change in profit sharing ratio does not result into dissolution of partnership firm as it results in a change in the existing agreement leading to the reconstitution of…

SOLUTION Difference between Dissolution of Partnership and Dissolution of Partnership Firm:

SOLUTION In case of dissolution of partnership, the firm continues to do business but with a changed agreement. In case of dissolution of partnership firm, the firm ceases to exist,…

SOLUTION Realisation Account.

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

SOLUTION Cash / Bank A/c             Dr. To Realisation A/c

SOLUTION Cash / Bank Account.

SOLUTION It is closed by transferring to the debit side of partner’s capital accounts in their profit-sharing ratio.

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