GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following provisions held for various assets should be transferred to the realisation account upon dissolution of the firm?
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Provision for Discounts
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Provision for Depreciation
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Investment Fluctuation Fund
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All of the above
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Explanation:
Detailed explanation-1: -Investment fluctuation fund is an item which is transferred to credit side of Realisation Account at the time of dissolution of partnership firm, but does not involve cash payment.
Detailed explanation-2: -All assets are transferred at book value because the main purpose to open realization account is to ascertain the profit or loss due to realization of assets and liabilities. If assets are not recorded at book value actual profit or loss can not be ascertained. Was this answer helpful?
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