What is generally the final step in closing the Realisation Account?

Correct answer: Transferring the profit or loss on realisation to the partners’ capital accounts

After recording the transfer and realisation of assets, settlement of external liabilities, and realisation expenses, the profit or loss on realisation is determined. This profit or loss is finally transferred to the partners’ capital accounts in their profit-sharing ratio, making option A correct. Options B and C are initial steps, while option D is generally completed before the account is closed. Exam tip: The final balance of the Realisation Account is transferred to the partners’ capital accounts.