Accounting (AS)·Partnerships · NSSCAS 2.2.1
Dissolution of a partnership
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Every partnership ends one day — a partner retires, the firm is sold, or the partners simply go their separate ways. In this lesson you learn how to close a partnership properly using the realisation account: sell the assets, pay the debts, share the profit or loss, and pay the partners until the bank lands on exactly nil. Dissolution is a favourite structured question in Paper 1, so we build one complete worked example line by line.
What you'll learn in this lesson
By the end you should be able to (NSSCAS Accounting (AS) 2.2.1):
- explain reasons why a partnership may be dissolved
- record the entries in the general journal and general ledger which arise from the dissolution of a partnership using a realisation account
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