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At the time of dissolution of a partnership firm, which of the following items is recorded on the credit side of the Realisation Account?

Answer and explanation

Correct answer: Sale proceeds of assets

The amount received from selling assets is credited to the Realisation Account because it represents the realisation proceeds. In contrast, the book value of assets transferred and realisation expenses are recorded on the debit side. Exam tip: Remember that asset sale proceeds are credited, while assets transferred and realisation expenses are debited.

Related tags

Partnership DissolutionRealisation AccountAsset Sale ProceedsAccounting EntriesClosing BusinessClosing The BusinessDissolution Of A Partnership FirmAccountancy

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