If realisation expenses amount to ₹2,500, on which side of the Realisation Account will they be recorded?

Correct answer: Debit side

Realisation expenses are incurred while disposing of assets and settling liabilities. They represent a loss or sacrifice for the firm, so they are recorded on the debit side of the Realisation Account. Recording them on the credit side is incorrect because that side generally records liabilities transferred and proceeds from the realisation of assets. Exam tip: remember that assets and realisation expenses usually appear on the debit side, while liabilities and asset realisation proceeds appear on the credit side.