At the time of dissolution of a partnership firm, an unrecorded liability of ₹5,000 is paid. Which account will be debited for this transaction?

Correct answer: Realisation Account

When an unrecorded liability is paid during dissolution, the payment is debited to the Realisation Account because it affects the profit or loss on realisation. The Cash Account is credited because cash goes out. Therefore, the Realisation Account is correct; the Cash Account is not debited. Exam tip: The usual entry is Realisation Account Dr. To Cash Account for payment of an unrecorded liability.