On dissolution of partnership firm, unrecorded assets when taken over…

The correct answer is Option (2) → Credit side of Realisation A/c

An unrecorded asset is not in the books, so it was never debited to the Realisation Account. When a partner takes it over, the firm realises its value: the partner’s capital account is debited and the Realisation Account is credited, the same as any other asset realised.

Option (1) Debit side of Realisation A/c — Incorrect. The debit side receives the book values of recorded assets transferred to it; an unrecorded asset has no book value.

Option (3) Credit side of Bank A/c — Incorrect. No cash is paid out when a partner takes over an asset.

Option (4) Debit side of Bank A/c — Incorrect. No cash is received either; the value is charged to the partner’s capital account.