On dissolution of the firm, Partners Capital Account are closed through:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Bank A/c
The partners' capital accounts are the last accounts settled on dissolution. Once the realisation profit or loss and every other item have been posted to them, each balance is settled in cash: paid out to a partner with a credit balance, or brought in by one with a debit balance.
Why the other options are incorrect
Option (1) Realisation A/c — Incorrect. Realisation Account is itself closed into the capital accounts, by transferring its profit or loss to them.
Option (2) Balance carried forward — Incorrect. Nothing is carried forward on dissolution; the firm ends and every account is closed.
Option (4) Partners' Current A/c — Incorrect. Current accounts, where kept, are themselves transferred to the capital accounts before the final settlement.
NCERT (2026-27 edition):
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