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JAMB Principles of Accounts 2005 Question 44

Question 44

Partnership Admission, Retirement and Dissolution

When assets are realized during a partnership dissolution, the entries for the proceeds are to debit

  1. A.cash account and credit realization account
  2. B.asset account and credit realization account
  3. C.realization account and credit cash account
  4. D.asset account and credit cash account
Show the answer and explanation

Answer: A (cash account and credit realization account)

Explanation

Money received from selling the assets comes into cash (debit) and is set against their book values in the realization account (credit).