Page 10 - LN DISSOLUTION OF FIRM

· Any liability taken over by any partner

And
· Undistributed losses and fictitious assets

· Loss on realization

· Any assets taken over by any partner

The balance of partners’ capital A/cs are closed in the following manner

a. For making final payment to a partner (if total of credit side is more
than the total of debit side)

Partner’s Capital A/c Dr.

To Cash/Bank A/c
(Being excess paid to partner in cash)

b. For any amount received form a partner against debit balance in his

capital account.

Cash/Bank A/c Dr.
To Partner’s Capital

(Being cash brought in by any partner)

Partner’s Capital A/c

Particulars (Rs.) Particulars (Rs.)

By balance bid
To Balance A/c (Cr. Balance)
(Dr. Balance)
By General Reserve A/c
To Profit and Loss A/c
To Advertisement Suspense By Profit and Loss A/c
A/c By workmen’s
To Realisation A/c
(Assets taken) Compensation Fund

To Realisation A/c By Realisation A/c
(Loss on Realisation )
(Liabilities taken)
To Cash/Bank A/c
(Excess cash paid) By Realisation A/c
(Profit on Realisation)