When realisation expenses are paid by the firm on behalf of a partner, such expenses are debited to:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Partner’s Capital A/c
Realisation expenses are the firm’s own expenses only when the firm bears them. When the firm pays an expense on behalf of a partner, the payment is really made for that partner, so his capital account is debited and the bank account credited; the Realisation Account is not touched.
NCERT (2026-27 edition):
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