Question

Write the word/term /phrase, which can substitute the following statements.

"Debit balance in realisation account."

Options

• Loss on realization account

• Gain on realization account

• Both Loss on realization account and Gain on realization account.

• None of the above

Answer 1

Loss on realization account

Explanation:

Loss on Realisation is the debit balance in the Realisation Account. It occurs when the debit side of the Realisation Account exceeds the credit side. This loss is shared among all partners according to their profit-sharing ratio.