Question

Cash balance shown in the balance sheet is shown on dissolution of firm in ______.

Options

• Realisation Account

• Cash Account

• Capital Account

• None of the Account

Answer 1

Cash balance shown in the balance sheet is shown on dissolution of firm in cash account.

Explanation:

During the dissolution of a firm, the cash account is used to reflect the cash balance of the firm. The cash account is updated to show the inflows and outflows of cash during the dissolution process, such as the sale of assets and payment of liabilities. The final balance in the cash account represents the amount that will be distributed among the partners according to their capital accounts after all liabilities are settled.