After realizing all assets, paying liabilities, and making the final settlement with partners on dissolution of a firm, what should generally be the final balance of the bank account?

Correct answer: Zero

At the end of dissolution, the amount realized from assets is used to pay liabilities, dissolution expenses, and the partners’ final claims. Any remaining amount is distributed among the partners, and the bank account is closed; therefore, its final balance is generally zero. A negative balance is not the normal conclusion because any deficiency is recovered from the partners. Exam tip: the bank account normally closes with a nil balance, whereas the Realisation Account may show a profit or loss.