Realisation profit is ultimately transferred to which account?

Correct answer: Capital Accounts

The correct answer is option B: the partners’ Capital Accounts. Realisation means closing the firm by selling assets, paying liabilities, and settling the business. The Realisation Account records the profit or loss from this closing process. If the realisation account has a credit balance, it represents profit. That profit belongs to the partners, so it is transferred to their Capital Accounts in their agreed profit-sharing ratio. Option A, Cash Account, is wrong because cash records receipts and payments; it does not receive the final profit as an owner’s share. Option B is correct because the partners’ capital increases by their shares of profit. Option C, Stock Account, is wrong because stock is an asset and its realisation is already dealt with during closure. Option D, Sales Account, is wrong because Sales Account is used for sales transactions, not for distributing partnership profit. A useful exam chain is: Realisation profit → partners’ profit-sharing ratio → Partners’ Capital Accounts. If the firm maintains fluctuating capital accounts, the credit may be posted there; the principle remains the same.