Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

Unrecorded liabilities, when paid by the partnership firm at the time of dissolution of the firm are shown in which account?

Options:

Credit side of Partner's capital A/c

Credit side of Realisation A/c

Debit side of Bank A/c

Debit side of Realisation A/c

Correct Answer:

Debit side of Realisation A/c

Explanation:

The correct answer is option 4- Debit side of Realisation A/c.

* For payment of liabilities, the following journal entry is passed-
    Realisation A/c Dr.
        To Bank A/c

As the liability is a loss for the firm so realisation account is debited and its payment will reduce the bank balance so bank account is credited.