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Which item is not included?

Answer and explanation

Correct answer: Partner’s capital

A partner’s capital is not transferred to the Realisation Account; it remains in the partner’s Capital Account. Non-cash assets and external liabilities are transferred to the Realisation Account, while realisation expenses are debited to it. Exam tip: Do not confuse a partner’s capital or loan with external liabilities transferred to the Realisation Account.

Related tags

Partnership DissolutionRealisation AccountPartner CapitalExternal LiabilitiesAccounting BasicsDissolution Of A Partnership FirmAccountancyClass 12 Mcq

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