On Dissolution of the firm, Partner's Capital accounts are closed thr…

The correct answer is Option (3) → Bank Account

After the profit or loss on realisation and all other balances are transferred, each partner’s capital account shows the final amount due to or from him. It is closed by payment from, or contribution into, the firm’s bank (cash): Partner’s Capital A/c Dr. To Bank A/c, or the reverse.

Option (1) Realisation Account — Incorrect. Realisation Account is closed by transferring its profit or loss to the capital accounts; it does not close them.

Option (2) Drawings Account — Incorrect. Drawings are transferred to the capital accounts earlier; they do not settle them.

Option (4) Loan Account — Incorrect. A partner’s loan is paid off before capital; it is not the account through which capital is settled.