When unrecorded liabilities are paid off by partners, these liabilities are shown in:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Debit side of Realisation Account
A liability not recorded in the books, when paid, is a loss on realisation like any other payment of liabilities, so it is shown on the debit side of the Realisation Account; if a partner pays it, his capital account is credited.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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