All assets (except Cash/Bank and fictitious assets) are transferred to the ______ side of ______ account.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Debit, Realisation
On dissolution every asset except cash, bank and fictitious assets is closed by transfer to the debit side of the Realisation Account at its book value. What is realised from the assets is later credited to the same account, so the account shows the profit or loss on realisation.
Option (2) Debit, Capital — Incorrect. Capital accounts receive only fictitious assets and the final profit or loss, not the real assets.
Option (3) Credit, Realisation — Incorrect. The credit side of the Realisation Account receives the liabilities and the amounts realised.
Option (4) Credit, Capital — Incorrect. Assets are not credited to the partners’ capital accounts.
NCERT (2026-27 edition):
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