On which basis is the Realisation Account prepared to determine the profit or loss arising from the realisation of assets and settlement of liabilities at the dissolution of a partnership firm?

Correct answer: प्राप्ति आधार (Realisation basis)

The Realisation Account is prepared to ascertain the profit or loss arising from the actual realisation of assets and settlement of liabilities; therefore, it follows the realisation basis. It is not merely a cash-basis account because the transfer of assets and liabilities and the resulting profit or loss are also recorded. Exam tip: At dissolution, remember that the primary purpose of the Realisation Account is to determine the profit or loss on realisation and settlement.