There was a liability for outstanding ex

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Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

There was a liability for outstanding expenses of ₹7,000 at the time of dissolution. It was settled for ₹5,000. Journal Entry will be..........

Options:

Bank A/C Dr. ₹7,000
To Realisation A/C ₹7,000

Realisation A/C Dr. ₹7,000
To Bank A/C ₹7,000

Realisation A/C Dr. ₹5,000
To Bank A/C ₹5,000

Bank A/C Dr. ₹5,000
To Realisation A/C ₹5000

Correct Answer:

Realisation A/C Dr. ₹5,000
To Bank A/C ₹5,000

Explanation:

Realisation A/C Dr. ₹5,000
To Bank A/C ₹5,000