Question 24 of 53beginner🧠 RememberFill in the Blanks1 mark

When the firm has agreed to pay the partner a fixed amount for realisation work irrespective of the actual amount spent, such fixed amount is debited to (Realisation/Capital) Account and Credited to (Capital/Bank) Account.

Correct Answer

Realisation; Capital

Exercise: Test your Understanding – III | Q: 8 | (Page 17)
For More Understanding

Explanation

According to the textbook context under point 9, when a partner is entitled to agreed remuneration for undertaking dissolution work, the journal entry is: Realisation Account is debited and Partner's Capital Account is credited. This fixed amount represents the agreed remuneration for realisation work, regardless of actual expenses incurred.

Solution Steps

  1. Step 1: Identify that the situation refers to agreed remuneration to a partner for dissolution work.

  2. Step 2: Refer to point 9 in the context which states: 'For agreed remuneration to such partner who agrees to undertake the dissolution work. Realisation A/c Dr. To Partner's Capital A/c'

  3. Step 3: Conclude that Realisation Account is debited and Partner's Capital Account is credited.

PreviousNext