In a firm, A and B were sharing profits and losses in a ratio of 3:2. At the time of dissolution, the balance of the Deferred Revenue Expenditure Account was ₹50,000. How will it be treated?

Debited to Partner's Capital Account

The correct answer is option 2- Debited to Partner's Capital Account.

Deferred Revenue Expenditure is a fictitious asset which is to be transferred (debited) to Partner's Capital Account  as it makes the decrease in the capital accounts of partner. Journal entry for this-
A's Capital A/c Dr.  30,000
B's Capital A/c Dr.  20,000
   To Deferred Revenue Expenditure A/c  50,000
(Distributed in old ratio 3:2)