Question

Consider the following statements

Statement 1: "On dissolution Bank Overdraft is transferred to Realisation Account."

Statement 2: lt is shown on the credit side of Bank 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 amount of the bank overdraft is not moved to the Realisation Account; instead, it appears on the credit side of the Bank Account.