Format: PDF • Chapter: 8 (Dissolution of a Partnership Firm) • Syllabus: CBSE / NCERT • Session: 2025–26
The chapter Dissolution of a Partnership Firm explains how all accounts are closed when a firm ends its business operations. These handwritten notes (free PDF) simplify every concept including realisation account, treatment of liabilities, assets disposal, settlement of partners’ accounts, and journal entries — all following the CBSE Class 12 2025-26 pattern.
📘 Chapter Index — Topics Covered
- Meaning of Dissolution and its types (Firm, Partnership, and Partner changes)
- Modes of Dissolution — by agreement, by notice, by court order
- Accounting treatment on dissolution
- Preparation of Realisation Account
- Settlement of liabilities and realization of assets
- Treatment of unrecorded assets and liabilities
- Settlement of partner’s capital and loan accounts
- Treatment of goodwill, reserves, and accumulated profits/losses
- Journal entries for dissolution transactions
- Practical illustrations and stepwise solutions
📝 Key Concepts Explained
- Realisation Account: Used to record the sale of assets and payment of liabilities during dissolution.
- Partner’s Capital Accounts: Updated for profit/loss on realization and final settlement.
- Cash/Bank Account: Prepared to show final payment and receipts, leading to closure.
- Liability Settlement Order: Outside liabilities → Partner’s loan → Capital → Final balance.
⭐ Features of the Handwritten Notes
- Neat, exam-ready handwritten format with all journal entries clearly shown.
- Step-by-step solved illustrations with working notes.
- Summary tables for realization and capital accounts.
- Previous-year CBSE-style questions with short hints.
- Concept booster boxes for quick revision before exams.
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📥 Download Chapter 8 – Dissolution of Partnership Firm (Handwritten Notes PDF)
🧠 How to Study This Chapter
- Revise Realisation Account format until you can prepare it without notes.
- Memorize the order of payment: Creditors → Partner Loans → Capital.
- Practice at least 5 full questions from sample papers to strengthen your preparation.
- Focus on journal entries for assets taken over by partners — these carry direct marks.
- Revise closing entries before exams; one question almost always appears from this part.
💡 Important Formulas & Entries
- Profit/Loss on Realisation = (Total Credits – Total Debits) in Realisation Account.
- When assets are sold:
Bank A/c Dr. → To Realisation A/c - When liability is paid:
Realisation A/c Dr. → To Bank A/c - When a partner takes over an asset:
Partner’s Capital A/c Dr. → To Realisation A/c - When liability is taken over by a partner:
Realisation A/c Dr. → To Partner’s Capital A/c
📚 Exam Tips
- Always start with a clean Realisation Account; show calculations clearly.
- Never forget to transfer old reserves and accumulated profits to capital accounts before closing.
- Cross-check totals in all accounts before moving to balance sheet.
- Marks are given for correct narration even if minor calculation errors occur.
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FAQ
Q1. What is Dissolution of a Partnership Firm?
It means complete closure of the firm’s business and settlement of all assets and liabilities among partners.
Q2. What is Realisation Account used for?
It records the realization (sale) of assets and payment of liabilities to calculate profit or loss on dissolution.
Q3. How is partner’s loan settled?
Partner’s loan is paid after outside liabilities but before settlement of capital accounts.
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