Question

Sidhi, Gyan and Gayatri were partners in a firm sharing profits and losses in the ratio of 3 : 2 : 2. On 31st March, 2025, their firm was dissolved. At the time of dissolution, a debtor amounting to ₹ 25,000, whose debt had been previously written off as bad debt, paid 40% of the amount. The accounting treatment for the above transaction will be:

विकल्प

• ₹ 10,000 will be credited to the bad debts recovered account.

• ₹ 10,000 will be credited to the debtor’s personal account.

• ₹ 10,000 will be credited to the realisation account.

• ₹ 10,000 will be credited to the bad debts account.

Answer 1

₹ 10,000 will be credited to the realisation account.

Explanation:

1. Cash Received = `25,000 xx 40/100`

= 10,000

2. Journal Entry:

Bank A/c    ...Dr.  ₹ 10,000

  To Realisation A/c  ₹ 10,000