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JAMB Principles of Accounts 2009 Question 42

Question 42

Partnership Admission, Retirement and Dissolution

In partnership account, conversion of non-cash assets into cash is referred to as

  1. A.realization
  2. B.disposal
  3. C.dissolution
  4. D.revaluation
Show the answer and explanation

Answer: A (realization)

Explanation

On dissolution the assets are sold (realised) for cash through the realisation account.