Question

State the accounting treatment for :
Unrecorded liabilities

Answer 1

Accounting Treatment for Unrecorded Liabilities
Unrecorded liabilities are those liabilities which are not recorded in the books of account. The accounting treatment for unrecorded liability is:
a) When the unrecorded liability is paid off
Realisation A/c                                                             Dr.
          To Cash A/c
(Unrecorded liability paid in cash)

b) When the unrecorded liability is taken over by a partner
Realisation A/c                                                             Dr.
          To Partner's Capital A/c
(Unrecorded liability  taken over by the partner)