Practicing Success
When unrecorded liabilities are paid off by partners, these liabilities are shown in: |
Debit side of Realisation Account Credit side of Realisation Account Debit side of Bank Account Credit side of Bank Account |
Debit side of Realisation Account |
The correct answer is Option (1) → Debit side of Realisation Account Unrecorded liabilities are those liabilities which are not recorded in the books of account. The accounting treatment for unrecorded liability is: (a) When the unrecorded liability is paid off: Realisation A/c Dr. To Bank A/c * When it is paid by the partner then Partner's Capital account is credited instead of bank account. |