At the time of dissolution, to which account is the final balance of the Realisation Account ultimately transferred?

Correct answer: Partners' Capital Accounts

The profit or loss on the Realisation Account is transferred to the partners’ capital accounts in their profit-sharing ratio. Therefore, its final balance is transferred to the partners’ capital accounts. The Cash Account records cash receipts and payments; it does not receive the realisation profit or loss. Exam tip: A credit balance in the Realisation Account indicates profit, while a debit balance indicates loss.