Study Material & Notes for the Chapter 7
Partnership - Dissolution of Partnership
IV. Memorandum Balance Sheet
- If Balance Sheet is not provided in the question a Memorandum Balance Sheet needs to be prepared.
- Whatever items of Assets, Liabilities, Reserves & Partner’s Capital with their respective amounts is provided in the question is put up in the Memorandum Balance Sheet.
- In the Memorandum Balance Sheet so prepared, the total of Liabilities side may not match with total of Assets side.
- The balancing figure represents the amount of any missing asset/liability/reserve
- If Liabilities > Assets the missing item is assumed to be Sundry Assets and
- if Assets > Liabilities the missing item is assumed to be Profit & Loss account
- Once Memorandum Balance Sheet is ready, Realisation A/c is prepared and the remaining steps for closure of various accounts are same.