A Realisation Account is opened at the time of: MCQ with Answer and Explanation

Question

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A Realisation Account is opened at the time of:

A. Dissolution of partnership firm

B. Retirement of a partner

C. Admission of a partner

D. Change in profit-sharing ratio

Answer: Option A

Solution (By JKSSB Mock Tests)

Realisation Account is prepared to close books on dissolution of the firm, not just reconstitution.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The 'Outstanding Salary' is recorded by:

A. Debit Cash A/c, Credit Salary A/c

B. Debit Outstanding Salary A/c, Credit Salary A/c

C. No entry

D. Debit Salary A/c, Credit Outstanding Salary A/c

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Correct Answer: Option D

Explanation:
To record accrued expense: Salary A/c Dr. To Outstanding Salary A/c.

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Question #2

S1: SEBI regulates the primary and secondary capital markets in India. S2: SEBI was established by a legislative act of Parliament. Which statement(s) is/are correct?

A. S2 only

B. Both S1 and S2

C. Neither S1 nor S2

D. S1 only

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Correct Answer: Option B

Explanation:
SEBI regulates both primary (new issues) and secondary (trading) markets to protect investors. It was initially established in 1988 and later given statutory powers through the SEBI Act, 1992. Both statements are correct.

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Question #3

The 'Emphasis of Matter' vs 'Other Matter' paragraph: Emphasis of Matter refers to:

A. Matters that require a modified opinion

B. Scope limitation

C. Matters appropriately presented or disclosed in the financial statements that are fundamental to users' understanding

D. Matters not presented or disclosed in the financial statements

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Correct Answer: Option C

Explanation:
Emphasis of Matter highlights a note/disclosure already in financial statements.

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