Anubha looked after the dissolution work for remuneration of Rs. 8,500 and agreed to bear dissolution expenses upto Rs. 6,000. Actual expenses paid by her were Rs. 7,600. What will be the journal entry for remuneration payable to Anubha?
(A) Realisation A/c is debited by 8,500
(B) Anubha's Capital A/c is credited by 8,500.
(C) Realisation A/c is debited by 13,600.
(D) Anubha's Capital is credited by 13,600.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → (A) and (B) only
Remuneration agreed for a partner who looks after the dissolution work is a cost of realisation, so Realisation A/c is debited and, since the firm owes it to the partner, her capital account is credited. The entry is Realisation A/c Dr. Rs. 8,500, To Anubha’s Capital A/c Rs. 8,500.
(A) Realisation A/c is debited by 8,500 Correct. The remuneration of Rs. 8,500 is an expense of dissolution and goes to the debit of Realisation Account.
(B) Anubha's Capital A/c is credited by 8,500. Correct. The amount is payable to Anubha, so her capital account is credited.
(C) Realisation A/c is debited by 13,600. Incorrect. Rs. 13,600 is the expenses paid (Rs. 7,600) plus the limit Anubha agreed to bear (Rs. 6,000); it is not the remuneration, and the expenses are a separate entry. Anubha bears expenses up to Rs. 6,000, so only the excess Rs. 1,600 (Rs. 7,600 − Rs. 6,000) is debited to Realisation Account in a second entry.
(D) Anubha's Capital is credited by 13,600. Incorrect. For the same reason, the remuneration entry credits her with Rs. 8,500 only.
NCERT (2026-27 edition):
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