When a firm is dissolved, the Balance of Investment Account and Balance of Investment Fluctuation Fund Account, shown by Firm's Balance Sheet are transferred in ................ and into ................... respectively:-
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Debit Side of Realisation Account, Credit side of Realisation Account
On dissolution every asset other than cash and bank is closed by transferring it to the debit side of the Realisation Account, so the balance of Investments Account goes there. The Investment Fluctuation Fund was set aside out of profits to meet a fall in the value of the investments; it is transferred to the credit side of the Realisation Account, where it stands against the investments it was kept for.
NCERT (2026-27 edition):
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