Question

Which of the following is transferred to realisation account:

Options

• Balance of Cash Account

• Balance of Profit & Loss Account

• Amount realised on sale of assets

• Reserves

Answer 1

Amount realised on sale of assets

Explanation:

The amount realised on the sale of assets is transferred to the realisation account during the dissolution of the firm. This account is used to record the sale of all assets and the settlement of liabilities, including the realisation of assets and any related gains or losses. The realisation account helps in determining the final profit or loss that will be distributed among the partners based on their profit-sharing ratio.