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If an unrecorded liability is taken over by a partner on dissolution, what happens in the partner's capital account?

Answer and explanation

Correct answer: It will be credited

Taking an unrecorded liability means the partner bears the firm's burden, so his capital account is credited. Realisation account has the opposite effect.

Related tags

Unrecorded LiabilityLiability Taken OverCapital AccountPartner AccountsDissolution Of A Partnership FirmAccountancyClass 12 Mcq

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