A loan from partner's relative is transferred to which account at the time of dissolution of partnership firm?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Realisation A/c.
The loan from a partner relative is just like a loan from a third party so it is a liability of the firm and transferred to realisation account like other liability.
For transfer of liabilities-
All external liability accounts including provisions, if any, are closed by transferring them to the credit of Realisation account.
Liabilities (individually) Dr.
To Realisation A/c