At the time of dissolution, if an asset is taken over by a partner, what journal will be recorded in the books of the firm :-
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Partner Capital A/c Dr. To Realisation A/c
On dissolution, every asset (other than cash and bank) is first transferred to the debit of the Realisation Account. The asset account is then closed, so when a partner later takes over an asset, it is the Realisation Account that is credited with the agreed value, and the partner's capital account is debited because he has received something from the firm.
Why the other options are incorrect
Option (2) Partner Capital A/c Dr. To Assets A/c — Incorrect. The asset account has already been closed by transfer to the Realisation Account, so it cannot be credited again.
Option (3) Bank A/c Dr. To Realisation A/c — Incorrect. This is the entry for an asset sold for cash; no cash comes in when a partner takes the asset over.
Option (4) Bank A/c Dr. To Assets A/c — Incorrect. It assumes cash is received and also credits the asset account, which is already closed.
NCERT (2026-27 edition):
|
