When realization expenses are paid by the firm on behalf of a partner, such expenses are debited to:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Partners capital account
Expenses paid by the firm on behalf of a partner are that partner’s personal burden, not the firm’s, so they are charged to his capital account; only realisation expenses that the firm bears itself are debited to the Realisation Account.
NCERT (2026-27 edition):
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