At the time of dissolution of partnership firm, Fictitious assets are transferred to the:

Debit of Partners' Capital A/c

The correct answer is Option (4) → Debit of Partners' Capital A/c.

Fictitious assets are transferred to the Debit of Partners' Capital A/c.

When the firm is dissolved, its books of account are to be closed and the profit or loss arising on realisation of its assets and discharge of liabilities is to be computed. For this purpose, a Realisation Account is prepared to ascertain the net effect (profit or loss) of realisation of assets and payment of liabilities which may be is transferred to partner’s capital accounts in their profit sharing ratio. Hence, all assets (other than cash in hand bank balance and fictitious assets, if any), and all external liabilities are transferred to this account. Fictitious assets are transferred to the Debit side of Partners' Capital account as these are treated as losses.