On dissolution of the firm, partner's capital accounts are closed through:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Bank Account
On dissolution, all assets are realised and all liabilities paid through the Realisation Account. Whatever is left in each partner’s capital account is then settled in cash: a partner with a debit balance brings money in, and partners with credit balances are paid off. The final entries therefore pass through the bank (or cash) account, which closes all the capital accounts.
NCERT (2026-27 edition):
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