Question : When a partner pays unrecorded liability is --------------------debited and concerned ------------------------is credited.
Option 1: Realization account debited, concerned partner's capital account
Option 2: Concerned partner's capital, realization account
Option 3: Unrecorded liability debited, cash account
Option 4: None of the above.
Correct Answer: Realization account debited, concerned partner's capital account
Solution :
Answer =
Realization account debited, concerned partner's capital account is credited.
If any recorded and unrecorded liabilities are paid by any partner realization account will be debited, and the concerned partner capital account will be credited by the same amount. In this case, the partner's capital balance will be increased.
Hence, the correct option is 1.
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