At the time of dissolution, when creditor accepts an asset whose value is much more than the amount due to him, he will .............. the excess amount which will be credited to .................. account.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Pay, Realisation
On dissolution, a creditor may take a firm’s asset in settlement of his dues. If the asset is worth more than what he is owed, he must pay the firm the difference in cash. The cash comes in as part of realising the asset, so the entry is Bank A/c Dr., To Realisation A/c. Revaluation Account belongs to reconstitution, not to dissolution.
NCERT (2026-27 edition):
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