Question

At the time of dissolution of partnership firm, the amount of ‘Bills Payable’ shown in the Liabilities Side of the Balance Sheet is transferred to ______.

Options

• Capital Accounts of Partners

• Realisation Account

• Cash Account

• Loan Account of Partners

Answer 1

At the time of dissolution of partnership firm, the amount of ‘Bills Payable’ shown in the Liabilities Side of the Balance Sheet is transferred to realisation account.

Explanation:

The amount of ‘bills payable’ recorded in the liabilities side of the balance sheet is transferred to the credit side of the realisation account at the moment of dissolution of a partnership firm.