In case of dissolution,bad debts recovered should be:

Question

Stock at the time of dissolution was appearing in books at Rs 50,000. Half of the stock was sold at a discount of 20% and the remaining was taken over by one of the partners at a 10% discount. What amount was received in cash at the time of realization of stock?

Answer 1

Upon dissolution of a partnership firm, any bad debts previously written off that are subsequently recovered are recognized as a gain. This gain is recorded in the Realisation Account, as this account is designated for all profits and losses incurred during the dissolution of the firm.

Correct Answer: (D) Credited to Realisation Account

In case of dissolution,bad debts recovered should be:

The Correct Option is D

Solution and Explanation

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