Question : In case of dissolution, assets are transferred to Realisation Account:
Option 1: At Book Value
Option 2: At Market Value
Option 3: Cost or Market Value, whichever is lower
Option 4: None of the Above
Answer (1)
27th Jan, 2024
Correct Answer: At Book Value
Solution : Since determining the profit or loss due to the realisation of assets and liabilities is the primary goal of opening a realisation account, all assets are transferred at book value. It is impossible to determine an actual profit or loss if assets are not recorded at book value.
Hence the correct answer is option 1.
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