Question

On dissolution, the balance of 'Profit and Loss Account' appearing on the Assets side of the Balance Sheet is transferred to:

Options

• Debit side of Realisation Account

• Credit side of Realisation Account

• Debit side of Partner's Capital Account

• Credit side of Partner's Capital Account

Answer 1

Debit side of Partner's Capital Account

Explanation:

When a partnership dissolves, the balance of the 'Profit and Loss Account' on the Assets side of a Balance Sheet is transferred to the debit side of the Partner's Capital Account.