JAMB UTME - Principles of Accounts - 2023

Answer Details

A control account is a summary account that represents a group of similar transactions or balances. It is used to simplify the management and analysis of a large number of individual accounts. The advantage of a control account is that it provides a way to monitor and track the overall balance or activity within a group of related accounts. It helps to ensure accuracy and identify any discrepancies or errors. Now, let's analyze the options provided one by one to determine which one is NOT an advantage of a control account: 1. **Difficulty in committing fraud**: This is indeed an advantage of a control account. By consolidating and summarizing the information from multiple accounts, it becomes more difficult for individuals to manipulate or misrepresent the data for fraudulent purposes. 2. **It can be used to detect missing figures**: This is also an advantage of a control account. By comparing the total balance of the control account with the sum of the individual accounts it represents, any missing figures or discrepancies can be easily identified. 3. **Helps to determine profit and loss**: This is another advantage of a control account. By summarizing the transactions related to revenue and expenses, a control account can provide an overview of the profit or loss generated by a particular area or department. 4. **Helps in locating errors**: This is also an advantage of a control account. By comparing the balances of the control account with the detailed records, any errors or discrepancies can be quickly identified and addressed. Based on the analysis of the options, it can be concluded that the **difficulty in committing fraud** is not an advantage of a control account. In fact, it is an advantage because it makes it more difficult for fraud to occur.

Answer Details

The ultimate controller, refers to the shareholder who has the ultimate control in the company and is not controlled by anyone. This ownership structure often results in a certain level of control between the ultimate controller and the listed company.

The account where the profit are distributed to the partner in their profit sharing ratio in partnership

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In a partnership, the account where the profit is distributed to the partners according to their profit sharing ratio is called the **appropriation account**. The appropriation account is a separate account created to record the distribution of profit among the partners. It is prepared after the preparation of the trading account, profit and loss account, and balance sheet. Here's a simple breakdown of the other options and their roles in the partnership: - The **trading account** is prepared to calculate the gross profit or loss of the partnership. It includes revenue from sales, cost of goods sold, and any other trading-related expenses. - The **profit and loss account** is prepared to determine the net profit or loss of the partnership. It includes all the operating expenses, such as salaries, rent, advertising, and depreciation. - The **balance sheet** is a financial statement that shows the financial position of the partnership at a specific point in time. It includes the assets, liabilities, and capital of the partnership. So, to summarize, while the trading account, profit and loss account, and balance sheet provide information about the overall financial performance and position of the partnership, the appropriation account specifically deals with the distribution of profit among the partners based on their profit sharing ratio.

Bello withdraws cash from bank to office, this is called ---------- entry

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Contra entry is an entry which is recorded to reverse or offset an entry on the other side of an account. If a debit entry is recorded in an account, it will be recorded on the credit side and vice-versa.

The balance as per bank statement is

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The balance as per bank statement is calculated by adding the balance as per cash book and the unpresented cheques then subtracting the uncredited cheques. Therefore, the balance as per bank statement is ₦5467 + ₦19404 - ₦4410 = ₦20,461. Unpresented cheques are cheques that have been issued by a company but have not yet cleared through the bank. Uncredited cheques are cheques that have been received by a company but have not yet cleared through the bank.

Which of these is the main source document for recording cash paid into bank?

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The main source document for recording cash paid into a bank is the pay-in-slip.
A pay-in-slip is a form provided by the bank that is filled out by the depositor when cash is deposited into their bank account. It includes important details such as the depositor's name, account number, and the amount of cash being deposited. The pay-in-slip also contains fields for the bank teller to acknowledge the deposit and stamp it.
When a person or business receives cash payments, they need to deposit that cash into their bank account. To do this, they would typically visit the bank and fill out a pay-in-slip with all the necessary information. The pay-in-slip serves as a record of the transaction and provides proof of the deposit made.
Unlike the other options mentioned, an invoice is a document that is issued by a seller to a buyer, indicating the products or services provided and outlining the amount due. A credit note is a document issued by a seller to a buyer to acknowledge a refund or credit towards a future purchase. A cheque book contains blank cheques that can be used to make payments from the account.
In summary, while invoices, credit notes, and cheque books have their own purposes, the pay-in-slip is the specific document designed for recording cash paid into a bank. It is important to use the correct source document to maintain accurate records of financial transactions.

Profit expressed in relation to cost of goods sold is

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Mark up is when profit is expressed as a percentage of cost price i.e cost of goods sold.

Subscription in advance is treated in the balance sheet as a

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Subscription in advance is treated in the balance sheet as a current liability.
This is because subscription in advance represents money that has been paid by customers for products or services that will be delivered or rendered at a future date. Since the provision of these products or services has not yet occurred, the company has an obligation to fulfill this commitment in the future.
As a current liability, subscription in advance is considered a short-term obligation that is expected to be settled within the next operating cycle, typically within one year. It is categorized as a liability because the company owes a future performance to its customers.
On the balance sheet, current liabilities are listed under the liabilities section and represent obligations that are expected to be settled in the near future using current assets or by creating new liabilities. Examples of other current liabilities include accounts payable, accrued expenses, and short-term loans.
It is important for companies to accurately present subscription in advance as a current liability on the balance sheet, as it reflects the company's financial obligations and helps provide a clearer picture of its overall financial health and future cash flow obligations.

Which of the following is charged to trading account?

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A trading account is a financial statement that shows the profit or loss of a business through its trading activities. It includes all the revenues and expenses directly related to the buying and selling of goods. Out of the options provided, the expenses that are charged to the trading account are: 1. Carriage Inwards: Carriage inwards refers to the transportation costs incurred in bringing goods into the business. It can include expenses such as freight charges, import duties, and handling fees. These expenses are directly related to the purchase of goods and are considered a part of the cost of inventory. Hence, carriage inwards is charged to the trading account. 2. Carriage Outwards: Carriage outwards refers to the transportation costs incurred in delivering goods from the business to the customers. It includes expenses such as delivery charges, packaging costs, and shipping fees. Carriage outwards is not directly related to the purchase of goods but is rather an expense incurred in selling them. Therefore, carriage outwards is not charged to the trading account. 3. Rent: Rent refers to the cost of occupying a property for business purposes. Rent is not directly related to the buying and selling of goods, but rather to the use of the premises where the business operates. Hence, rent is not charged to the trading account. 4. Discount Allowed: Discount allowed represents the reduction in the selling price of goods given to customers as an incentive or reward. It is a reduction in revenue and does not directly relate to the cost of inventory or the buying and selling of goods. Therefore, discount allowed is not charged to the trading account. In summary, the expenses that are charged to the trading account are carriage inwards. Rent, discount allowed, and carriage outwards are not charged to the trading account as they are not directly related to the buying and selling of goods.

The goodwill is?

Answer Details

Goodwill = Purchase consideration - value of assets
Total value of assets = 190,000 + 170,000 + 60,000 - (50,000)
= 370,000

Therefore, Goodwill = 400,000 - 370,000
= ₦30,000

Dairo and Segun are in partnership sharing profits and losses in the ratio 2:3 respectively. The information below relates to their business for the year ended 31st December, 2018.
 

- Interest on drawings 10%

- Interest on capital 5%

- Profit for the year ₦36,000

- Salary: Segun ₦10,000
Segun's share of profit is

Answer Details

Interest on drawings = 10%
- Dairo = 10% x 12,0000
= ₦1200
- Segun = 10% x 18,000
= ₦1800

Interest on capital = 5%
- Dairo = 5% x 120,000
= ₦6,000
- Segun = 5% x 60,000
=₦3,000

Salary: segun = ₦10,000

Segun's share of profit = (Net profit + int on drawings) - ( int on capital + segun salary )
= (36000 + 1200 + 1800) - ( 6000 + 3000 + 10000)
= 39000 - 19000
= 20,000

Total ratio = 2+ 3
= 5
Therefore, Segun share of profit = 3 /5 x 20000
= ₦12,000

In the absence of a partnership agreement, a loan given to the partnership by a partner attracts interest of

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Where there is no agreement betwen the partners, the following must applied:
- there is no interest on capital
- no salary for partners acting in the business
- no interest to be charged on drawings
- profit and loss are to be shared equally
- 5% interest a year on loans made by partners in excess of the agreed capitals
- no partners may introduce a new person without the consent of all existing partners

Given:

I. It records subscription in arrears
II. Payments of liabilities is effected
III. The account does not show if cash payment is revenue or capital expenditure
IV. It performs the same function as cash book

The features of receipts and payment account includes:

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The features are:
- include capital and revenue items
- accruals and prepayments are not included
- it is a real account
- only actual receipts and payments are recorded
- balance represent cash in hand

Given:

I. Settlement of debts
II. Cessation of business
III. Introduction of assets
IV. Disposal of assets

Which of these constitutes dissolution of partnership?

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Bankruptcy of a partner, illegality of object of the business, expiration of the time given, non performance of the business, admission of a new partner, withdrawal or retirement of partners give rise to dissolution of partnership.

The purchases ledger control account is also known as

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The purchases ledger control account is also known as the creditors control account.
Let me explain it simply for you.
In a business, the purchases ledger records all the transactions related to buying goods or services on credit. It keeps track of the amounts owed to suppliers or vendors. Now, the purchases ledger control account is a summary account that helps in monitoring and controlling these transactions.
Think of it as a big picture view. The purchases ledger control account combines all the individual creditor balances from the purchases ledger. It shows the total amount the business owes to its creditors at any given time.
By using the purchases ledger control account, the business can easily track the total purchases made on credit and manage its outstanding payments to suppliers. It provides a summary of the business's total credit purchases and the total amount owed to creditors.
So, in summary, the purchases ledger control account is the same as the creditors control account because it represents a summary of all the amounts owed to suppliers or vendors.

A part of public company's profit belonging to the shareholders is

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The part of a public company's profit that belongs to the shareholders is called dividends. Dividends are payments made by a company to its shareholders as a reward for owning its stock. They are usually distributed in the form of cash but can also be given as additional shares of stock. Dividends are a way for shareholders to earn a return on their investment. When a company earns a profit, it can choose to reinvest that money back into the business or distribute it to the shareholders. By receiving dividends, shareholders can directly benefit from the company's success. It is important to note that dividends are not guaranteed and can vary from year to year. The company's board of directors decides whether to declare dividends and how much to distribute based on factors such as profitability, financial health, and future growth prospects. Unlike dividends, the other options mentioned (right issue, bonus, and public issue) do not represent a share of the company's profit. A right issue is when a company offers its existing shareholders the right to buy additional shares at a discounted price. A bonus is an additional issue of shares given to existing shareholders as a way to increase their ownership percentage. A public issue refers to the process of offering shares to the general public for the first time during an initial public offering (IPO) or a subsequent public offering. In summary, dividends are the part of a public company's profit that is distributed to the shareholders as a way for them to earn a return on their investment.

When the goods are sold on credit to a buyer, the account receivable account will be

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When the goods are sold on credit to a buyer, the account receivable account debits, increasing the company's assets as the amount is receivable from the third party. The corresponding credit will be in the sales account, increasing the company's revenue.

An advantage of FIFO method of stock valuation is that

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One of the advantages of FIFO method is that the stock received first will be issued out first thereby reducing the problem of deterioration or obsolesence and also items are issued in order of receipt therefore, it is realistic.

The journal has the following headings except

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A journal is a book of original entry where all the financial transactions of a business are recorded in a chronological order. It serves as a primary record-keeping tool for accounting purposes. The main purpose of a journal is to provide a detailed record of each transaction that occurs in a business. This allows for accurate and transparent financial reporting and analysis. The journal typically has several headings to organize the information recorded. These headings include the date, debit, credit, and discount. - The "date" heading is used to record the date on which the transaction occurred. This is important for reference and to maintain a chronological order of the transactions. - The "debit" heading is used to record the amount of money or value that is going out of the business due to the transaction. This could include expenses, assets being sold, or liabilities being paid off. - The "credit" heading is used to record the amount of money or value that is coming into the business due to the transaction. This could include revenue, loans, or other sources of income. - Finally, the "discount" heading is used to record any discounts given or received during the transaction. Discounts are often given to customers as an incentive or to settle outstanding debts. Therefore, based on the given options, the heading that would not typically be found in a journal is "discount." This is because the journal mainly focuses on recording and summarizing financial transactions, and discounts are not directly related to the core financial operations of a business.

Discount allowed is enjoyed by

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Discount allowed is a benefit that is enjoyed by customers. When a company offers a discount, it means they are reducing the usual price of a product or service. This reduction in price is given to the customers as an incentive to encourage them to make a purchase. Discounts can be given for various reasons, such as promotional offers, seasonal sales, or loyalty programs. By offering discounts, companies aim to attract more customers and make their products or services more affordable and appealing. Managers, staff of the company, and suppliers do not directly benefit from the discount allowed. While managers may strategize and set the discount policies, it is ultimately the customers who get to enjoy the discounted prices. Therefore, when it comes to discounts, it is the customers who receive the advantage of reduced prices, making it a benefit enjoyed by them.

The discount column on the left-hand side of cash book represents a discount

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In a cash book, the discount column on the left-hand side does not represent a discount. The purpose of this column is to record any discounts that are allowed to a debtor. When a debtor pays their outstanding debt earlier than the due date, the creditor may offer them a discount as an incentive for early payment. This discount is recorded in the discount column on the left side of the cash book.
Therefore, the correct answer is "allowed to a debtor."

Shares are said to be authorized when they are

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Authorized shares are defined as the maximum number of shares that a company is legally allowed to issue to investors as per its own determinations

The use of three column cash book is determined by

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The cash discount is allowed for prompt payment of an account or for payment within a specified period of time. It is divided into discount allowed and discount received.

Which of the following is found on the credit side of a profit and loss account?

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On the credit side of a profit and loss account, we can find items that generate income or gains for a business. Let's discuss each option and determine whether it belongs on the credit side or not. - **Advertising:** Advertising expenses are costs incurred to promote products or services. These expenses reduce a company's income or profits and are recorded on the debit side of the profit and loss account. Therefore, advertising does not belong on the credit side. - **Dividend received:** Dividends received are income earned by a company from its investments in other companies. Dividend income increases a company's overall income or profits and is recorded on the credit side of the profit and loss account. So, dividends received are found on the credit side. - **Wages and salaries:** Wages and salaries represent the compensation paid to employees for their work. These expenses are considered as costs incurred to generate revenue and are recorded on the debit side of the profit and loss account. Therefore, wages and salaries do not belong on the credit side. - **Bank charges:** Bank charges are fees or costs that a company incurs for various banking services, such as transaction fees, account maintenance fees, etc. These charges reduce a company's income or profits and are recorded on the debit side of the profit and loss account. Therefore, bank charges do not belong on the credit side. In conclusion, out of the given options, only **dividend received** will be found on the credit side of a profit and loss account.

The authority warrant issued prior to the approval of the appropriate bill at the begining of the year

Answer Details

The correct answer is **provisional general warrant**. A provisional general warrant is issued by the authority at the beginning of the year to allow for the necessary expenses before the approval of the appropriate bill. It serves as a temporary authorization to spend money until the formal annual general warrant is approved. The purpose of this warrant is to ensure that essential and urgent expenditures can be made in a timely manner, even without the formal approval of the bill. It helps to prevent delays in government operations and ensures that necessary services are not interrupted due to the lack of a finalized budget. The provisional general warrant is not a long-term solution, and it is eventually replaced by the annual general warrant once the bill is approved. The annual general warrant provides a more comprehensive and detailed allocation of funds for the entire fiscal year. In summary, the provisional general warrant allows for necessary expenses at the beginning of the year until the appropriate bill is approved, ensuring the smooth operation of government services.

The short term solvency of a company is determined with ------- ratio

Answer Details

The short term solvency of a company is determined using the current ratio. The current ratio is a financial ratio that measures a company's ability to pay off its short-term liabilities (debts due within one year) with its short-term assets (assets that can be converted into cash within one year).
To calculate the current ratio, you divide a company's current assets (such as cash, inventory, and accounts receivable) by its current liabilities (such as accounts payable and short-term loans). The formula is:
Current Ratio = Current Assets / Current Liabilities
The current ratio provides valuable insight into a company's ability to meet its short-term financial obligations. A ratio higher than 1 indicates that the company has enough current assets to cover its current liabilities. This generally indicates good short-term solvency.
For example, if a company has current assets of $100,000 and current liabilities of $50,000, its current ratio would be 2. This means that the company has twice as many current assets as current liabilities, which is generally a good sign.
On the other hand, a current ratio lower than 1 implies that the company may have trouble paying off its short-term debts. This could indicate potential financial strain or difficulty in managing short-term liquidity.
Overall, the current ratio helps assess a company's ability to meet its short-term obligations. It provides a simple and comprehensible way to evaluate a company's short-term solvency by comparing its current assets to its current liabilities.

The following was extracted from the books of MEGA COMPANY NIG. LTD

The working capital of the company is

Answer Details

Working capital = Current Assets - Current Liabilites
= (350,000 + 25,000 + 5,500) - ( 116,500 + 7,500)
= 380,500 - 124, 000
= ₦256,500

The authority to transfer fund from one head to another within the same organization is called

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The authority to transfer funds from one head to another within the same organization is called virement.
Virement is a process that allows organizations to shift money from one budget head to another. This transfer of funds is done to reallocate resources based on the changing needs and priorities of the organization.
For example, let's say an organization has allocated a certain amount of money for a particular project in their budget. However, during the course of the year, they realize that another project requires additional funding. Instead of going through a lengthy process of obtaining new funds, the organization can use virement to transfer money from the initial project's budget to the new project's budget.
Virement provides flexibility and allows organizations to make adjustments without having to seek additional approvals or go through administrative hurdles. It is an internal process that helps ensure efficient resource utilization within an organization.
In summary, virement is the authority to transfer funds from one head to another within the same organization. It allows for the reallocation of financial resources based on changing priorities and needs.

The following appears in the trading account except

Answer Details

The item that does not appear in the trading account is **carriage outward**. The trading account is a financial statement that shows the calculation of gross profit or loss by comparing the value of goods bought (cost of goods sold) with the value of goods sold (sales). Let's break down the other three options: 1. **Carriage inward**: This refers to the transportation cost incurred to bring goods into the business. It is considered as part of the cost of goods sold, as it directly relates to acquiring the goods for sale. 2. **Opening stock**: This represents the value of goods held in the beginning of the accounting period, before any sales or purchases. It is included in the trading account as it helps determine the cost of goods sold. 3. **Sales**: This represents the total revenue generated from selling goods or services. It is a crucial component of the trading account since it represents the value of goods sold during the period. However, **carriage outward** does not belong in the trading account. It refers to the transportation cost incurred when delivering goods to customers. Carriage outward is not directly related to the cost of goods sold or the calculation of gross profit/loss. Therefore, it is not included in the trading account. In summary, the trading account includes carriage inward, opening stock, and sales, while carriage outward is not part of it.

Answer Details

Current assets are shown in the balance sheet in order of performance as **stock, debtors, bank, and cash**. Stock refers to the inventory or goods a business holds for resale. It is shown first because it represents an essential part of a business's operations. By displaying stock at the top, it emphasizes its importance in the business's overall performance. Debtors are individuals or entities who owe money to the business. They come next because the amounts owed by debtors are expected to be converted into cash within a relatively short period. It is important for the business to accurately track and assess the amounts owed to maintain healthy cash flow. Bank refers to the amount of money held in the business's bank accounts. This includes funds available for immediate use and those that may require a few days to clear. Bank balances are considered highly liquid assets and hold a significant position in the balance sheet. Cash represents physical currency and cash equivalents held by the business. It is displayed last in the order of performance since it is the most liquid asset and readily available for immediate use. Therefore, the correct order of performance for current assets on the balance sheet is stock, debtors, bank, and cash.

The accounting system in which only one aspect of transaction is recorded is

Answer Details

The accounting system in which only one aspect of a transaction is recorded is called single entry accounting. In this system, only the cash or assets received or paid are recorded, without recording the corresponding liabilities or expenses. In single entry accounting, each transaction is recorded only once, typically in a single column cash book. This means that there is no systematic tracking of the financial impact of transactions on both sides of the equation (assets = liabilities + equity). It is important to note that single entry accounting is generally considered less comprehensive and reliable compared to double entry accounting. Double entry accounting, on the other hand, is a more complete and accurate system where each transaction is recorded twice—once as a debit and once as a credit. This allows for a better understanding of the financial health of a business and provides a basis for generating accurate financial statements. Overall, single entry accounting is a simpler but less robust approach to recording financial transactions, as it does not provide a complete picture of a company's financial position and performance.

Answer Details

Factory overheads are also known as indirect cost. This term refers to the expenses incurred in a factory that cannot be directly attributed to the production of a specific product or service. These costs include items such as factory rent, utilities, depreciation of factory equipment, and indirect labor costs. Unlike direct manufacturing expenses, which are directly tied to the production process, factory overheads contribute to the overall manufacturing process but are not directly traceable to a specific product.

Danladi Bako's Statement of Affairs as at 30/06/17
 

What is the value of Dalandi Bako's capital?

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The capital is calculated as the difference between total assets and total liabilities. Therefore, the correct answer is ₦60,650.

When expenses are paid on behalf of the venture, the accounting entries is to debit

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Expenditure paid on bahalf of joint venture
Accountint entries:
Dr: Joint venture account
Cr: Bank account

Income and Expenditure account is the same as the --------- of a sole trader

Answer Details

The correct answer is profit and loss account.
The Income and Expenditure account is the same thing as the profit and loss account for a sole trader.
The profit and loss account shows all the revenue and expenses incurred by the sole trader during a specific period of time, usually a year. It includes all the sales or income earned by the sole trader, as well as the costs and expenses incurred in running the business.
The revenue or income includes sales from products or services, any interest earned, and other sources of income. The expenses include costs incurred in producing or providing the products or services, wages or salaries of employees, rent, utilities, and other operating expenses.
By subtracting the total expenses from the total revenue, the profit or loss for the sole trader can be calculated. If the revenue is higher than the expenses, it represents a profit, while if the expenses exceed the revenue, it represents a loss.
In summary, the profit and loss account, or the Income and Expenditure account, for a sole trader shows the financial performance of the business by summarizing the revenues and expenses over a specific period. It helps the sole trader assess the profitability of the business and make informed decisions.

Determine the net profit

Answer Details

To determine the net profit, we need to calculate the Cost of Goods Sold (COGS) and deduct it from the net sales.
First, let's calculate the COGS: - Start with the stock on January 1st: 2,600 - Add purchases: 4,000 - Add carriage inwards: 500
Total Cost of Goods Available for Sale: 7,100
Next, let's calculate the net sales: - Total Sales: 9,000 - Deduct carriage outwards: 500
Net Sales: 8,500
Now, we can calculate the COGS by dividing the net sales by the total cost of goods available for sale and multiplying by 100: COGS = (COGS / Total Cost of Goods Available for Sale) * Net Sales
COGS = (7,100 / 8,500) * 100 COGS = 83.53%
Finally, we can calculate the net profit by deducting the COGS from the net sales: Net Profit = Net Sales - COGS
Net Profit = 8,500 - (8,500 * 0.8353) Net Profit = 8,500 - 7,098.75 Net Profit = 1,401.25
Therefore, the net profit is #1,401.25.
The correct answer is: #1,400

Larry Limited has 4,000,000 ordinary shares of 50k each and 150,000 5% prefrence shares of ₦1 each fully paid.
 

At the end of the period, what is the balance of the profit and loss appropriation account?

Answer Details

Balance c/d = net profit + profit and loss - ( goodwill + ordinary share + preference share)
= (90,000 + 10,000) - ( 1000 + 25000 + 7500)
= 100,000 - 33500
= ₦66500

Which of the following is used to service all operations of government?

Answer Details

The option that is used to service all operations of government is **consolidated revenue fund**. The consolidated revenue fund is like a big pot where all the money collected by the government goes into. This includes the taxes that people and businesses pay, as well as other sources of revenue such as fees and fines. Once the money is in the consolidated revenue fund, it is then used to pay for various government expenses. This includes things like salaries of government employees, funding for public programs and services, and infrastructure projects like building roads and schools. The important thing to note is that the consolidated revenue fund is used to cover all aspects of government operations. It is the central source of income that allows the government to function and provide services to the public. Therefore, the correct option that is used to service all operations of government is the **consolidated revenue fund**.

Which of these is not a subsidiary books?

Answer Details

The subsidiary book is a book of original entr or prime entry which consists of: purchases day book, sales day book, returns inwards day book, returns outward day book, cash book, journal, petty cash book.

Accounting entry for dissolution expenses is

Answer Details

The correct accounting entry for dissolution expenses is:
Dr: Realization account; Cr: Cash account.
When a partnership is dissolved, there may be expenses incurred during the winding up of the business. These expenses could include legal fees, accounting fees, and other costs related to the dissolution process.
In accounting, we need to record these expenses accurately. The first step is to debit (Dr) the Realization account. The Realization account is used to record all the assets that are sold or converted to cash during the liquidation process. By debiting this account, we reduce the value of the assets being realized.
Next, we credit (Cr) the Cash account. This entry reflects the payment of actual cash for the dissolution expenses. By crediting the Cash account, we increase the amount of cash that is being paid out from the partnership.
Overall, the dissolution expenses are recorded by debiting the Realization account and crediting the Cash account. This ensures that the expenses are properly accounted for and the financial statements accurately reflect the partnership's liquidation process.