Select the way by which provisions appearing in the Balance Sheet of a partnership firm are closed
at the time of firm's dissolution.
(
This question was previously asked in
Shift 11/06/2023 3:30 PM - 6:30 PM
A
Transferring them to the Credit of Partner's Capital A/c
B
Transferring them to the Credit of Partner's Current A/c
C
Transferring them to the Credit of Realisation A/c
D
Transferring them to the Debit of Realisation A/c
Correct Answer
Transferring them to the Credit of Realisation A/c
Detailed Explanation
When a partnership firm is dissolved, the provisions appearing in the Balance Sheet of the partnership firm are typically closed by transferring them to the credit of the "Realisation Account." This is done to account for the realization of assets and the settlement of liabilities during the dissolution process.
So, the correct option is:
(3) Transferring them to the Credit of Realisation A/c
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