Which account is debited for Realisation expenses paid?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Realisation Account
Expenses of realisation reduce the gain from selling assets and paying liabilities, so they are a cost of the dissolution. When the firm pays them, the Realisation Account is debited and the Bank Account is credited. No separate realisation expense account is opened.
NCERT (2026-27 edition): |