Practicing Success
Which of the following will not be shown in Realisation Account? |
Unrecorded Asset realised Unrecorded Liabilities paid off Partner's Loan to the firm Realisation Expenses |
Partner's Loan to the firm |
The correct answer is option (3) : Partner's Loan to the firm Loan by a partner to the partnership firm is not an external liability. So, it will not be transferred to the realisation account. It is also not transferred to partner's capital account because it is paid after settling outside liabilities but before payment of capital. The journal entry for this- Partner's loan A/c Dr. |