Answer in one sentence only.
1) What is the dissolution of partnership firms?
Ans: Dissolution of the partnership firm means complete closure of business activities and stoppage of partnership relations among all the partners.
2) When is the Realisation Account opened?
Ans: Realization Account was opened at the time of the dissolution of the partnership firm.
3) Which accounts are not transferred to a Realisation account?
Ans: Cash/Bank balance, reserve funds, Profit and Loss A/c balance, Partners’ Loan accounts, etc. are not transferred to realisation Account.
4) Who is called an Insolvent person?
Ans: Whose capital A/c shows debit balance and who is not in a position to meet his capital deficiency even from his private property is called an insolvent person.
5) What is a capital deficiency?
Ans: The debit balance of an insolvent partner’s Capital Account which an insolvent partner cannot pay is called a capital deficiency.
6) In what proportion is the balance on Realisation Account transferred to Partners’ Capital / Current Accounts?
Ans: The balance on realisation Account is transferred to Partners’ Capital / Current Accounts in their profit sharing ratio.
7) Who should bear the capital deficiency of an insolvent partner?
Ans: The capital deficiency of insolvent partners should be borne by the solvent partners.
8) Which account is debited on repayment of Partner’s Loan?
Ans: Partner’s Loan Account is debited on repayment of partner’s loan.
9) Which account is debited on payment of dissolution expenses?
Ans: Realisation Account is debited on payment of dissolution expenses.