Question

At the time of dissolution of a partnership firm, fictitious assets are transferred to the:

• A. Credit of Realisation A/c
• B. Debit of Realisation A/c
• C. Credit of Partners’ Capital A/c
• D. Debit of Partners’ Capital A/c

Answer 1

The Correct Option is B

During the dissolution of a partnership firm, fictitious assets, which include items like preliminary expenses, advertising expenses, and deferred revenue expenditures, lack tangible existence and market value. These must be expensed off as part of the dissolution procedure.

• Fictitious assets are recorded on the debit side of the Realisation Account. This treatment is applied because these assets are being written off, and the Realisation Account serves as the ledger for all assets and liabilities realized or settled during dissolution.

Consequently, the accurate response is: (B) Debit of Realisation A/c.