Unrecorded liabilities when paid at the time of dissolution of a partnership firm, are shown in:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Debit of Realisation Account
An unrecorded liability is not in the books, so when it is paid on dissolution the payment is a loss of realisation: Realisation Account is debited and Bank Account is credited.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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