Question:
Sandhya and Suman were partners in a firm sharing profits and losses in the ratio of 3 : 5. They decided to dissolve the firm on 31st March, 2024. On the date of dissolution, the Balance Sheet of the firm showed a balance of 80,000 in sundry debtors and a balance of 5,000 in provision for bad debts account. How much amount will be transferred to Realisation Account to close Sundry Debtors Account?
Sandhya and Suman were partners in a firm sharing profits and losses in the ratio of 3 : 5. They decided to dissolve the firm on 31st March, 2024. On the date of dissolution, the Balance Sheet of the firm showed a balance of 80,000 in sundry debtors and a balance of 5,000 in provision for bad debts account. How much amount will be transferred to Realisation Account to close Sundry Debtors Account?
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While closing the books during dissolution, always transfer the full asset (gross) value to Realisation Account. Provisions are treated as separate liabilities or credits.
Updated On: Jul 15, 2025
- 75,000
- 85,000
- 80,000
- 90,000
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The Correct Option is C
Solution and Explanation
Step 1: Sundry Debtors appear on the asset side of the Balance Sheet at 80,000.
Step 2: Provision for Bad Debts of 5,000 appears on the liabilities side (or as a deduction from Sundry Debtors).
Step 3: On dissolution, the full gross amount of debtors is transferred to the Realisation Account.
Note: Provision for Bad Debts is not netted off while transferring assets. It is closed by crediting the Realisation A/c separately.
Step 4: Therefore, Sundry Debtors to Realisation A/c = 80,000
Provision for Bad Debts A/c will be transferred to the credit side of Realisation A/c separately.
Realisation A/c Dr. & 80,000
To Sundry Debtors A/c & 80,000
Provision for Bad Debts A/c Dr. & 5,000
To Realisation A/c & 5,000
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