Question

At the time of dissolution, if realised value of tangible asset is not given, it will be taken as realised at ______.

Options

• Nil.

• Book Value

• Market Value

• None of these.

Answer 1

At the time of dissolution, if realised value of tangible asset is not given, it will be taken as realised at book value.

Explanation:

During the dissolution of a partnership firm, if the question is silent about the realisation of a tangible asset (such as machinery, building, furniture, or stock), its realised value is automatically assumed to be equal to its book value. This accounting rule is based on the assumption that physical assets always hold some residual or scrap value that can be recovered at cost.