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Realisation A/c is prepared to
AShow new partners capital (typical) (typical) (typical)
BRecord admission entries (typical) (typical) (typical)
CRecord sale of assets and payment of liabilities on dissolution
DCompute goodwill (typical) (typical) (typical) (typical)
Answer & Solution
Correct answer: C. Record sale of assets and payment of liabilities on dissolution
1. Realisation A/c is opened only on firm dissolution.
2. All assets (other than cash/bank) are transferred to its debit at book value; all external liabilities to its credit.
3. Cash realised from assets and paid to liabilities flows through it; balance is profit or loss on realisation.
4. Hence (B) is correct.
_Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 6 "Dissolution of Partnership Firm", §6.3 ¶§6.3_