In NCERT Class 12 Accountancy Chapter 4, titled "Dissolution of Partnership Firm", students learn about the process of closing a partnership firm. The chapter covers the settlement of liabilities, distribution of assets, and preparation of necessary accounts, including realization, partner’s capital, and cash accounts. It also explains the distinction between dissolution of a firm and dissolution of a partnership.
This article provides a comprehensive resource for exam preparation. It includes sample MCQs and subjective questions for CBSE and CUET, alongside downloadable PDFs of Class 12 Accountancy Chapter 4 MCQs and previous year questions for detailed practice of NCERT Class 12 Dissolution of Partnership Firm.
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NCERT Class 12 Accountancy Chapters
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Class 12 Accountancy Chapter 4 MCQs
This question bank includes previous years' CUET and CBSE MCQs, along with questions curated by subject experts. Below are 5 sample multiple-choice questions (MCQs) for Class 12 Accountancy Chapter 4: Dissolution of Partnership Firm. For the full set of 50 questions, download the PDF using the link provided below.
1- Match List - I with List - II.
LIST - I LIST - II A Compulsory Dissolution I. With the consent of all partners B. Dissolution by Court II. In case of partnership at will C. Dissolution by Notice III. When a partner becomes insane D. Dissolution by Agreement IV. When the business of the firm closes by law.
Choose the correct answer from the options given below:
(a) A - IV, B - II, C - III, D - I (b) A - I, B - II, C - III, D - IV
(c) A - IV, B - III, C - II, D - I (d) A - III, B - II, C - I, D - IV
2. On dissolution of partnership, goodwill account is transferred to:
(a) The debit side of Realisation Account.
(b) The credit side of Realisation Account.
(c) The credit side of Partner‟s Capital / Current Account.
(d) The debit side of Partner‟s Capital / Current Account
3.According to Indian Partnership Act, 1932, when the firm is dissolved, cash received on sale of assets are applied in following order:
(A) Paying to each partner proportionately what is due to him/her on account of capital.
(B) In paying the secured debts of the firm to the third parties.
(C) In paying each partner proportionately what is due to him/her from the firm for advances as distinguished from capital.
(D) The residue, if any shall be divided among the partner's in their profit sharing ratio.
(E) In paying unsecured debt of firm to third parties.
Choose the correct answer from the options given below:
(a) (C), (B), (D), (A), (E) (b) (B), (E), (C), (A), (D)
(c) (A), (B), (C), (D), (E) (d) (D), (C), (B), (A), (E)
4. Identify the term that indicate change in existing profit-sharing ratio among partners.
(a) Dissolution of Partnership Firm (b) Dissolution of Partnership
(c) Amalgamation of Partnership Firm (d) Valuation of Firm
5. Consider the facts from the following related to compulsory dissolution of a partnership firm.
(A) When all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract.
(B) When the business of the firm becomes illegal.
(C) When a partner becomes permanently incapable of performing his duties as a partner.
(D) When a partner persistently commits breach of partnership agreement.
(E) When some event has taken place which makes it unlawful for the partners to carry on the business of the partnership firm.
Choose the correct answer from the options given below:
(a) (A), (B) and (D) only (b) (A), (B) and (E) only
(c) (A), (B) and (C) only (d) (A), (B), (C) and (D) only
Class 12 Accountancy Chapter 4 Subjective Questions Without Solutions
This question bank includes previous years' CBSE subjective questions (2 marks and above) without solutions, along with expert-curated questions. Below are 5 sample subjective questions for Class 12 Accountancy Chapter 4: Dissolution of Partnership Firm. To access all questions, download the PDF from the link provided below.
- State any two situations when compulsory dissolution of a partnership firm takes place.
(CBSE 2022, 2M)
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- State any two situations when dissolution of a partnership firm takes place on Court‟s orders.
(CBSE 2022, 2M)
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- State any two situations when the dissolution of a partnership firm takes place by agreement.
(CBSE 2022, 2M)
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- Pass the necessary journal entry on dissolution of a partnership firm if an unrecorded creditor of Rs. 40,000 was paid by a partner, Amar, at a discount of 10%.
(CBSE 2022, 2M)
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- Pass the necessary journal entries for the following transactions on the dissolution of the partnership firm of Tanay and Mehak after various assets (other than cash) and external liabilities have been transferred to Realisation Account:
(i) Creditors of Rs. 60,000 accepted stock valued at Rs. 59,000 in full settlement of their claim.
(ii) Tanay agreed to pay off his wife's loan of Rs. 12,000.
(iii) The firm had a debit balance of Rs. 18,000 in the profit and loss account on the date of dissolution.
(iv) An unrecorded liability of Rs. 20,000 was paid by partner, Mehak, at a discount of 10%.
(v) Tanay‟s loan of Rs. 4,000 was paid through a cheque.
(vi) Expenses on dissolution amounted to Rs. 11,000, which were paid by Mehak.
(CBSE 2023, 4M)
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Sub Areas of Chapter 4: Dissolution of Partnership Firm
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Chapter Name
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Sub Topics
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Dissolution of Partnership Firm
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4.1 Introduction
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4.2 Modes of Dissolution
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4.3 Realization of Assets and Liabilities
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4.4 Preparation of Realization Account
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4.5 Settlement of Partner’s Capital Accounts
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4.6 Distribution of Cash
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4.7 Treatment of Reserves and Surplus
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Review of NCERT Class 12 Accountancy Chapter 4
In NCERT Class 12 Accountancy Chapter 4, "Dissolution of Partnership Firm," students learn about the systematic closure of a partnership firm. The chapter highlights the realization process, settlement of accounts, and the preparation of various dissolution-related accounts.
Mastering this chapter is essential for understanding the legal and financial aspects of dissolving a business. By practicing MCQs and subjective questions, students can develop a clear understanding of dissolution accounting.