Question

After transferring liabilities like creditors and bills payable in the Realisation Account, in the absence of any information regarding the payment, such liabilities are treated as ______.

Options

• Never paid

• Fully paid

• Partly paid

• None of these.

Answer 1

After transferring liabilities like creditors and bills payable in the Realisation Account, in the absence of any information regarding the payment, such liabilities are treated as fully paid.

Explanation:

During dissolution, all third-party liabilities (like creditors) must be cleared legally. If the question is completely silent about their payment, it is automatically assumed that the firm paid them off fully at 100% book value to close the business debts.