In case of dissolution of partnership firm, any liability assumed/paid by a partner is shown on ........?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Debit of Realisation Account
The firm’s liabilities have already been transferred to the credit of the Realisation Account. When a partner pays or takes over one of them, the firm’s obligation is met, so the payment is recorded on the debit side of the Realisation Account, and the partner’s capital account is credited because the firm now owes him that amount.
NCERT (2026-27 edition):
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