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Question
State whether the following statement is True or False with reason.
Realisation Loss is not transferred to the insolvent partner’s capital account.
Options
True
False
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Solution
This statement is False.
All partners of the firm are responsible for Loss on realisation and hence loss on realisation is supposed to be transferred to all Partners’ Capital Account, without any discrimination of solvent or insolvent.
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| Balance Sheet as on 31.03.2013 | |||
| Liabilities | Amount Rs | Assets | Amount Rs. |
| Sundry Creditor | 12,500 | Debtors 56,250 | |
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|
Sushil’s Capital |
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| ? | ₹ 10,000 | ₹ 40,000 |
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