{"id":43394,"date":"2024-04-15T21:28:49","date_gmt":"2024-04-15T21:28:49","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=43394"},"modified":"2024-04-15T21:28:49","modified_gmt":"2024-04-15T21:28:49","slug":"when-a-firm-is-dissolved-goodwill-account-is-closed-by-transferring-to","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/when-a-firm-is-dissolved-goodwill-account-is-closed-by-transferring-to\/","title":{"rendered":"When a firm is dissolved, goodwill account is closed by transferring to"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Capital account of the partners&#8221; option2=&#8221;Revaluation Account&#8221; option3=&#8221;Profit and Loss Account&#8221; option4=&#8221;Realisation Account&#8221; correct=&#8221;option4&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>D. Realisation Account<\/strong><\/p>\n<p>Goodwill is an intangible asset that represents the value of a company&#8217;s reputation, customer base, and other factors that make it more valuable than the sum of its assets. When a firm is dissolved, the goodwill account is closed by transferring it to the realisation account. The realisation account is a temporary account that is used to record the sale of the firm&#8217;s assets and the distribution of the proceeds to the partners.<\/p>\n<p>The other options are incorrect because:<\/p>\n<ul>\n<li>Option A: The capital account of the partners is a permanent account that is used to record the partners&#8217; capital contributions and withdrawals. Goodwill is not an asset that belongs to the partners, so it cannot be transferred to their capital accounts.<\/li>\n<li>Option B: The revaluation account is a temporary account that is used to record the revaluation of assets and liabilities. Goodwill is not an asset that is revalued, so it cannot be transferred to the revaluation account.<\/li>\n<li>Option C: The profit and loss account is a temporary account that is used to record the firm&#8217;s income and expenses. Goodwill is not an expense, so it cannot be transferred to the profit and loss account.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Capital account of the partners&#8221; option2=&#8221;Revaluation Account&#8221; option3=&#8221;Profit and Loss Account&#8221; option4=&#8221;Realisation Account&#8221; correct=&#8221;option4&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-43394","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>When a firm is dissolved, goodwill account is closed by transferring to<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/when-a-firm-is-dissolved-goodwill-account-is-closed-by-transferring-to\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"When a firm is dissolved, goodwill account is closed by transferring to\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Capital account of the partners&#8221; 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