Question

Consider the following statements

Statement 1: At the time of dissolution of Partnership Firm all assets should be transferred to Realisation A/c.

Statement 2: All assets except the cash or bank balances are transferred to the Realisation Account.

Options

• Only statement 1 is correct.

• Only statement 2 is correct.

• Both the statements are incorrect.

• None of the above

Answer 1

Only statement 2 is correct.

Explanation:

The Realisation Account receives all assets except cash and bank balances. As a result, the supplied statement is false.