On dissolution of a partnership firm, if a partner undertakes the responsibility to make payment of a liability of the firm, then, the account to be debited is:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Realisation Account.
On dissolution of a partnership firm, if a partner undertakes the responsibility to make payment of a liability of the firm, then, the account to be debited to Realisation Account.
For a liability which a partner takes responsibility to discharge, the journal entry will be:
Realisation A/c Dr.
To Partner’s Capital A/c