"A partner has agreed to undertake the dissolution work and agreed to pay and bear the realisation expenses himself".
Choose the correct entry for the given case.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) - No entry is required.
When a partner has agreed to bear the realisation expenses:
(i) if payment of realisation expenses is made by the firm
Partner’s Capital A/c Dr.
To Bank A/c
(ii) if the partner himself pays the realisation expenses, no entry is required.