Question

On taking responsibility for payment of a liability of ₹ 50,000 by a partner, the account credited will be ______.

Options

• Realisation Account

• Cash Account

• Capital Account of the Partner

• Liability Account

Answer 1

On taking responsibility for payment of a liability of ₹ 50,000 by a partner, the account credited will be capital account of the partner.

Explanation:

When a partner takes responsibility for the payment of a liability during the dissolution of a firm, the Capital Account of the Partner is credited. This is because the partner is assuming the liability, increasing their responsibility in the firm. The corresponding debit entry would typically be made to the Realisation Account to reflect the settlement of that liability.