An expense of ₹2,000 has been incurred in the Realisation Account. On which side of the account will this amount be recorded?

Correct answer: Debit side

Realisation expenses are recorded on the debit side of the Realisation Account because they represent an expense or loss to the firm. The credit side generally records the realisation of assets and the settlement of liabilities. Therefore, the ₹2,000 expense is entered on the debit side. Exam tip: Remember—realisation expenses are debited, while assets realised are credited.