If liability is assumed by a partner at the time of dissolution of partnership firm then Partner’s Capital Account is:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- credited.
For a liability that a partner takes responsibility to discharge, the following journal entry is passed:
Realisation A/c Dr.
To Partner’s Capital A/c
As partner has taken responsibility to discharge liability, his capital account balance is increased as firm has to pay amount to partner later. That's why his account is credited.