Question

On firm’s dissolution, which one of the following account should be prepared at the last?

Options

• Realisation Account

• Partner’s Capital Accounts

• Cash Account

• Partner’s Loan Account

Answer 1

Cash Account

Explanation:

On the dissolution of a firm, the Cash Account is prepared last, as it reflects the final distribution of any remaining cash after settling all other accounts. The Realisation Account is prepared first to record the sale of assets and settlement of liabilities, followed by the Partner's Capital and Loan Accounts to determine the final distribution among the partners. The Cash Account shows the actual cash flow after all these transactions are completed.