At the time of dissolution, if the total debit balance of the Realisation Account exceeds its total credit balance, what will be the result?

Correct answer: वसूली हानि, जो साझेदारों के लाभ-विभाजन अनुपात में पूँजी खातों में हस्तांतरित होगी (Realisation loss transferred to partners’ capital accounts in their profit-sharing ratio)

In the Realisation Account, the book value of assets and the transfer of liabilities are generally recorded on the debit side, while cash realised from assets and relevant settlement items are recorded on the credit side. If the total debit balance exceeds the total credit balance, the account shows a realisation loss, which is debited to the partners’ capital accounts in their profit-sharing ratio. Conversely, an excess of the credit balance indicates a realisation profit. Exam tip: Debit excess in the Realisation Account means loss; credit excess means profit.