On dissolution of a partnership firm, the Partner’s Loan Account is transferred to:
Answer & explanation
Correct answer: option 4
The correct answer is option 4- None of these.
We do not transfer the loan by a partner to the firm to Realisation account, it remains in its account itself. At the time of settlement, i.e., payment of liabilities, we pay the partner’s loan after paying the outside liabilities but before payment of capital. So, partner's loan account is maintained separately.