Question

On dissolution of the firm, the amount received from the sale of the unrecorded asset is credited to ______.

Options

• Partner's Capital Accounts

• Profit and Loss Account

• Realisation Account

• Cash Account

Answer 1

On dissolution of the firm, the amount received from the sale of the unrecorded asset is credited to Realisation Account.

Explanation:

The money collected from the sale of an unrecorded asset is credited to the Realisation Account upon the firm's dissolution, and when an unrecorded liability is paid, it is debited to the Realisation Account.