Question : Assertion (A): Balance at Banks is transferred to Realisation Account.
Reason (R): Balance at Bank is not to be realised but instead distributed in its present form.
Option 1: Assertion (A) and Reason (R) are correct but the reason (R) is not the correct explanation of Assertion (A)
Option 2: Both, Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
Option 3: Only Assertion (A) is correct.
Option 4: Assertion (A) is not correct but the Reason (R) is correct.
Correct Answer: Assertion (A) is not correct but the Reason (R) is correct.
Solution : The Cash and Bank Accounts at the time of Realisation contain a record of all cash and/or bank transactions. As a result, the amounts in Cash and Bank are not transferred to the Realisation Account.
Hence the correct answer is option 4.
