Question

On dissolution of a firm, realisation account is debited with ______.

Options

• All assets to be realised

• All outside liabilities of the firm

• Cash received on sale of assets

• Any asset to be taken over by one of the partners

Answer 1

On dissolution of a firm, realisation account is debited with all assets to be realised.

Explanation:

The realisation account is debited with all assets to be realised and credited with all outside liabilities of a company when it dissolves.