On dissolution of the firm partner's capital accounts are closed thro…

The correct answer is Option (3) → Bank Account

After the Realisation Account is closed and its profit or loss is transferred, each partner’s capital account shows the final amount due to or from him. A partner with a credit balance is paid from the bank, and one with a debit balance brings in cash, so the capital accounts are closed through the Bank (or Cash) Account.

• Option (1) Realisation Account — Incorrect. Only the profit or loss on realisation goes to the capital accounts; it does not close them.

• Option (2) Drawings Account — Incorrect. Drawings are closed into the capital accounts, not the other way round.

• Option (4) Loan Account — Incorrect. A partner’s loan is paid off separately, before the capitals.