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What is meant by an unrecorded asset?

Answer and explanation

Correct answer: An asset not recorded in the books

An unrecorded asset is an asset that does not appear in the firm's books but is discovered or realised at the time of dissolution. It may be sold for cash or taken over by a partner, and the amount realised is generally credited to the Realisation Account. Option A describes a recorded asset, so it is incorrect. Exam tip: Remember the key phrase—an unrecorded asset is not shown in the books.

Related tags

Partnership DissolutionRealisation AccountUnrecorded AssetsAccountancy Class 12Dissolution Of A Partnership FirmAccountancyClass 12 Mcq

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