Match the following lists.
| List 1 | List 2 |
| A) Loss on realisation | I) Debit partner's capital A/c |
| B) Profit on realisation | II) Credit realisation A/c |
| C) Asset sold | III) Credit partner's capital A/c |
| D) Creditors paid | IV) Debit realisation A/c |
Choose the correct answer from the options given below.
Answer & explanation
Correct answer: option 2
The correct answer is option 2- A-I, B-III, C-II, D-IV
| List 1 | List 2 |
| A) Loss on realisation | I) Debit partner's capital A/c |
| B) Profit on realisation | III) Credit partner's capital A/c |
| C) Asset sold | II) Credit realisation A/c |
| D) Creditors paid | IV) Debit realisation A/c |
* For transfer of profit and loss on realisation-
(a) In case of profit on realisation
Realisation A/c Dr.
To Partners’ Capital A/c (individually) A/c
(b) In case of loss on realisation
Partners’ Capital A/c (individually) Dr.
To Realisation A/c
* For sale of assets-
Bank A/c Dr.
To Realisation A/c
* For payment of liabilities i.e. creditors-
Realisation A/c Dr.
To Bank A/c