Question

1
What entry shall be passed if a debtor Ghanshyam for Rs.50000 agreed to pay the
dissolution expenses which were Rs.40000 in full settlement of his debt​

Answer 1

Answer:

No entry will be passed because at the time of dissolution, the realization account is prepared which is prepared to ascertain the profit or loss on the assets realized and payment of liabilities to outsiders.

Explanation:

(a)  Realisation A/C.....           Dr.            40000

                To Cash A/C                                     40000

(Being cash paid on partial settlement of creditors)

(b) No entry is passed since full settlement of creditors is made by taking over Machinery.

(c)  Cash A/C......                   Dr.             30000

                To Realisation A/C                          30000

(Being cash received on partial settlement of creditors)

The accounting treatment in the event of a partner's death is as follows: Comparable to that of a partner retiring, in which case the deceased partner's property is passed to his legal representatives and settled similarly to that of the partner who retired.

retires However, there is one key difference: whereas retirement often occurs at the end of a fiscal year or accounting year, partner deaths can occur at any moment.

As a result, in the case of a partner, his rights shall also include his share of gains or losses, interest on draws (if any), and interest on capital from the last date of the Balance Sheet until the date of his death of these.

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