Which account is debited for Realisation expenses paid?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Realisation Account.
Realisation Account is debited for Realisation expenses paid.
When Realisation expenses is paid, the following journal entry is passed-
Realisation A/c Dr.
To cash A/c.
This journal entry shows that the realisation expenses are paid by the firm in cash. It reduces the cash balance of the firm.