In case of dissolution of the firm, partners' capital accounts are closed through:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Bank Account
After the Realisation Account is closed, the balance in each partner’s capital account is settled in cash: the firm pays out a credit balance and the partner brings in a debit balance. The capital accounts are therefore closed through the Bank (cash) Account.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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