If a partnership firm is being dissolved, a liability taken over by a partner is credited to :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Partner's Capital Account
On dissolution every outside liability is transferred to the credit of Realisation Account. When a partner takes one over, he pays it for the firm, so the firm owes him that amount: his Capital Account is credited, and Realisation Account is debited as if the liability had been paid.
Why the other options are incorrect
Option (1) Bank Account — Incorrect. No cash of the firm moves; Bank is credited only when the firm pays a liability itself.
Option (2) Realisation Account — Incorrect. Realisation Account is the debit side of this entry, standing in for the payment of the liability.
Option (3) Balance Sheet — Incorrect. A balance sheet is a statement, not an account, so nothing is debited or credited to it.
NCERT (2026-27 edition):
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