Target Exam

CUET

Subject

Part A

Chapter

Dissolution of Partnership Firm

Question:

Unrecorded Debtors, are realised at the time of dissolution of a Partnership Firm, will be shown in:

Options:

Partners' Capital Account

Partner's Current A/c

Debit of Bank Account

Debit of Realisation Account

Correct Answer:

Debit of Bank Account

Explanation:

The correct answer is option 3- Debit of Bank Account.

Unrecorded Debtors, are realised at the time of dissolution of a Partnership Firm, will be shown in the Debit of Bank Account.

The unrecorded asset has been already transferred to the realisation account. So any amount realised from this asset is related with the realisation account not asset account. On receiving money on realisation, cash or bank balance is increased. So, Increase in cash is debited and realisation account is credited. The journal entry for this-
Bank A/c Dr.
  To Realisation A/c

Note: As per NTA, both Option (2) and Option (3) were considered correct in this question, which created ambiguity. To ensure clarity and avoid confusion, Option (2) which was given as "Credit of Realisation" has been changed to "Partner's Current A/c" so that only one option remains correct, for the benefit of students.