Which item among the following is NOT listed on the credit side of a Realization Account?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Loan to other parties
Loan to other parties → Asset → Debited, not credited
On dissolution of a firm, the Realisation Account is prepared to close assets and liabilities.
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Credit side of Realisation A/c includes:
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All liabilities transferred (like creditors, bills payable, bank loan, mortgage loan, outstanding expenses, provisions, etc.).
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These are credited because they represent claims against the firm.
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Debit side of Realisation A/c includes:
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All assets transferred (like debtors, stock, furniture, investments, loan to other parties, etc.), except cash/bank and fictitious assets.
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