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What is the effect on the Realisation Account when an unrecorded liability is paid?

Answer and explanation

Correct answer: Realisation Account will be debited

When an unrecorded liability is paid, the payment is debited to the Realisation Account and Cash or Bank is credited. The payment is a loss arising on dissolution, so the Realisation Account is debited.

Related tags

Unrecorded-LiabilityRealisation-AccountClosing The BusinessDissolution Of A Partnership FirmAccountancyClass 12 Mcq

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