Unrecorded liabilities when paid are shown in:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Debit of Realisation Account
On dissolution, every payment of a liability is passed through the Realisation Account. An unrecorded liability paid in cash is a payment like any other, so the entry is Realisation A/c Dr. to Bank/Cash A/c.
NCERT (2026-27 edition):
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