{"id":55161,"date":"2024-04-16T00:22:40","date_gmt":"2024-04-16T00:22:40","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=55161"},"modified":"2024-04-16T00:22:40","modified_gmt":"2024-04-16T00:22:40","slug":"realisation-account-is-prepared-by-a-partnership-firm-at-the-time-of","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/realisation-account-is-prepared-by-a-partnership-firm-at-the-time-of\/","title":{"rendered":"Realisation account is prepared by a Partnership firm at the time of"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a974b80db325\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Admission of a new partner                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Retirement of a partner                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"true\">\r\n                    Dissolution of the firm                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    Closing of every accounting year                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is C. Dissolution of the firm.<\/p>\n<p>A realisation account is a statement that shows the assets and liabilities of a partnership firm at the time of its dissolution. It is prepared to calculate the amount due to each partner after the assets have been sold and the liabilities have been paid.<\/p>\n<p>A realisation account is not prepared at the time of admission or retirement of a partner, as these events do not result in the dissolution of the firm. A realisation account is also not prepared at the end of every accounting year, as this is simply a reporting period and does not result in the dissolution of the firm.<\/p>\n<p>Here is a <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> brief explanation of each option:<\/p>\n<ul>\n<li>Option A: Admission of a new partner. When a new partner is admitted to a partnership firm, the existing partners&#8217; capital accounts are adjusted to reflect the new partner&#8217;s share of the firm&#8217;s capital. This is done by creating a new capital account for the new partner and transferring an amount from the existing partners&#8217; capital accounts to the new partner&#8217;s capital account. A realisation account is not prepared at this time, as the firm does not dissolve.<\/li>\n<li>Option B: Retirement of a partner. When a partner retires from a partnership firm, the remaining partners&#8217; capital accounts are adjusted to reflect the retiring partner&#8217;s share of the firm&#8217;s capital. This is done by creating a new capital account for the retiring partner and transferring an amount from the remaining partners&#8217; capital accounts to the retiring partner&#8217;s capital account. A realisation account is not prepared at this time, as the firm does not dissolve.<\/li>\n<li>Option C: Dissolution of the firm. When a partnership firm dissolves, the assets are sold and the liabilities are paid. The remaining amount is then distributed to the partners according to <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> their profit-sharing ratio. A realisation account is prepared to calculate the amount due to each partner.<\/li>\n<li>Option D: Closing of every accounting year. At the end of every accounting year, a partnership firm prepares a profit and loss account and a balance sheet. These statements do not result in the dissolution of the firm, and therefore a realisation account is not prepared.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/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":[],"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>Realisation account is prepared by a Partnership firm at the time of<\/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\/realisation-account-is-prepared-by-a-partnership-firm-at-the-time-of\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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