Question

______ is prepared at the time of dissolution.

Options

• Revaluation Account

• Profit & Loss Account

• Profit and Loss Appropriation Account

• Realisation Account

Answer 1

Realisation Account is prepared at the time of dissolution.

Explanation:

At the time of dissolution of a partnership firm, the Realisation Account is prepared to record the sale of assets and the payment of liabilities. It helps in determining the profit or loss on realisation, which is then distributed among the partners in their profit-sharing ratio. Other accounts like Revaluation Account or Profit & Loss Appropriation Account are prepared during reconstitution or for regular profit distribution, not specifically for dissolution.