When a partner bears realisation expenses whom will the firm credit?

Correct answer: Partner's Capital Account

The direct answer is B: the partner’s capital account is credited. Realisation expenses are expenses connected with closing the firm. If the firm pays them, Cash or Bank is credited. But here a partner personally bears the expense, so the firm has not paid cash. The firm must record that the partner has paid an amount on its behalf and is entitled to reimbursement. The entry is Realisation Account Dr. to Partner’s Capital Account, so the partner’s capital account is credited. Option A is wrong because no cash is paid by the firm in this situation. Option B is correct because crediting the capital account records the amount payable to or adjustable with that partner. Option C, Sales Account, is unrelated to dissolution expenses. Option D, Purchase Account, is also unrelated and is not used to record this payment. Do not confuse “expense paid by partner” with “expense paid to partner”: the former credits the partner’s capital account as reimbursement.