Question

At the time of dissolution of the firm, the partner’s wife’s loan is transferred to ______.

Options

• Revaluation А/c

• Realisation A/c

• Her husband’s Capital A/c

• Mrs. Partner’s Loan A/c

Answer 1

At the time of dissolution of the firm, the partner’s wife’s loan is transferred to Realisation A/c.

Explanation:

A loan from a partner’s wife is legally treated as an outside (third-party) liability because she is an outsider to the business. Since all external liabilities must be transferred to the Realisation Account to be closed and paid off, her loan is transferred directly to the Realisation Account.