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At the time of dissolution, if an unrecorded asset is sold, in which account is the amount received credited?

Answer and explanation

Correct answer: Realisation Account

An unrecorded asset does not appear in the books before dissolution. When it is sold, the proceeds are credited to the Realisation Account because they arise from the disposal of an asset. The Cash Account is debited to record the receipt, but it is not credited with the disposal income. Exam tip: For an unrecorded asset sold for cash, debit Cash Account and credit Realisation Account.

Related tags

Partnership DissolutionRealisation AccountUnrecorded AssetsAccounting EntriesClass 12 AccountancyDissolution Of A Partnership FirmAccountancyClass 12 Mcq

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