Unrecorded assets when taken over by a partner are shown in

The correct answer is Option (3) → Credit of Realisation A/C

An unrecorded asset never appeared in the books, so it is not transferred to the Realisation Account. When a partner takes it over, the firm has realised that asset by adjusting it against the partner's claim, just as if it had been sold to him. The entry is Partner's Capital A/c Dr., To Realisation A/c, so the value appears on the credit side of the Realisation Account.

Option (1) Debit of Realisation A/C — Incorrect. The debit side carries the assets transferred at book value and the liabilities paid; an asset taken over is a realisation, a gain to the account.

Option (2) Debit of bank A/C — Incorrect. No cash comes in when a partner takes over the asset; his capital account is debited instead.

Option (4) Credit of Bank A/C — Incorrect. Bank is credited only when the firm pays out cash, which does not happen here.