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How is a partner's loan paid off on dissolution of the firm?
ADr Partner's Loan, Cr Bank
BDr Realisation, Cr Bank
CDr Bank, Cr Partner's Loan
DDr Capital, Cr Realisation
Answer & Solution
Correct answer: A. Dr Partner's Loan, Cr Bank
A partner's loan is repaid directly in cash, so the loan account is debited and bank credited.
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