At the time of dissolution of a partnership firm, fictitious assets a…

The correct answer is Option (1) → Partners' Capital Account

Fictitious assets are debit balances that have no value and cannot be sold, such as a debit balance of the Profit and Loss Account, deferred revenue expenditure or advertisement suspense. On dissolution they are not sent to the Realisation Account, because nothing will be realised from them. They are a loss already suffered, so they are written off to the partners' capital accounts in their profit sharing ratio: each partner's capital account is debited and the fictitious asset account is credited.