On dissolution of firm, loss in realisation account is debited/credited to which account?

Partner's Capital Accounts (Debit)

The correct answer is option 3- Partner's Capital Accounts (Debit).

For transfer of profit and loss on realisation:

(a) In case of profit on realisation - Realisation A/c Dr.
                                                            To Partners’ Capital A/c (individually) A/c

(b) In case of loss on realisation- Partners’ Capital A/c (individually) Dr.
                                                            To Realisation A/c

So, On dissolution of firm, loss in realisation account is debited to partner's capital account. As it is a loss which decreases the capital balance of the partners.