Question : On dissolution of a firm, the realization account is credited with
Option 1: when liabilities are paid
Option 2: when assets are transferred
Option 3: when liabilities paid by any partner
Option 4: when cash received from the sale of assets
Correct Answer: when cash received from the sale of assets
Solution : Answer = When cash received from the sale of assets When assets are realized, the bank account will be debited, and the realization account will be credited. The amount realized on the sale of assets is transferred to the credit of the Account (including unrecorded assets and assets taken by a partner against capital). Hence, the correct option is 4.
Question : Unrecorded liabilities, when paid on the dissolution of a firm, are credited to
Question : On dissolution of a partnership firm, the amount received from the sale of assets is debited to
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