After transferring liabilities like creditors and bills payables in the Realization Account, in the absence of any information regarding their payment, such liabilities are treated as:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Fully paid
Liabilities transferred to the Realisation Account must be settled before the books are closed. When the question gives no information about their payment, they are taken to be paid in full at their book value (Realisation A/c Dr. To Bank A/c).
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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