Question

Unrecorded assets when taken over by a partner are shown in ______.

Options

• Debit of Realisation Account.

• Debit of Bank Account.

• Credit of Realisation Account.

• Credit of Bank Account.

Answer 1

Unrecorded assets when taken over by a partner are shown in Credit of Realisation Account.

Explanation:

During dissolution, any value recovered from an asset must be credited to the Realisation Account to calculate the final profit or loss. Since an unrecorded asset is not on the Balance Sheet, it has no opening book value on the debit side. When a partner takes it over, the firm records this recovery by crediting the Realisation Account and debiting that partner’s Capital Account.