Which of the following will affect Realisation Gain/Loss where A, B and C were partners.

A. Realisation Expenses paid by A, to be borne by B
B. Realisation Expense paid by firm, to be borne by C
C. B' Loan of ₹50,000 was settled at ₹45,000
D. Creditor of ₹60,000 took over stock of ₹85,000 in full settlement
E. Realisation Expense paid by B on behalf of firm

Choose the correct answer from the options given below.

C & E only

The correct answer is Option (3) - C & E only.

A. Realisation Expenses paid by A, to be borne by B-  This transaction will effect the partners capital account not the realisation account.

B. Realisation Expense paid by firm, to be borne by C-
C's capital A/c Dr. To cash A/c. This will effect the capital account of C. His capital account is debited with the expense amount as amount payable to the partner by the firm is reduced by this amount.

C. B' Loan of ₹50,000 was settled at ₹45,000- Partner's loan account is a liability for the firm so it is paid by the firm by passing journal entry- B' Loan A/c Dr. ₹50000 To Realisation A/c Dr. 5000 To Bank A/c   45000. 5000 is the discount received by the firm so it is a gain which is credited to realisation account.

D. Creditor of ₹60,000 took over stock of ₹85,000 in full settlement- When a creditor accepts an asset in full and final settlement of his account, no journal entry needs to be recorded.

E. Realisation Expense paid by B on behalf of firm- The journal entry for this- Realisation A/c Dr. To B’s Capital A/c