Question

Match List-I with List-II

List-I (Cases for payment of realization expenses)	List-II (Journal entry)
(A) When realisation expenses are incurred and paid by the firm	(I) Realisation A/c Dr. To Partner's Capital A/c
(B) When realisation expenses are paid by a partner on behalf of the firm:	(II) No entry is required
(C) When a partner has agreed to bear the realisation expenses and the realisation expenses are paid by the firm	(III) Realisation A/c Dr. To Bank A/c
(D) When a partner has agreed to bear the realisation expenses and the partner himself pays the realisation expenses.	(IV) Partner's Capital A/c Dr. To Bank A/c

Choose the correct answer from the options given below:

• (A) - (I), (B) - (II), (C) - (III), (D) - (IV)
• (A) - (III), (B) - (I), (C) - (IV), (D) - (II)
• (A) - (I), (B) - (II), (C) - (IV), (D) - (III)
• (A) - (III), (B) - (IV), (C) - (I), (D) - (II)

Hint:

Firm pays for its own cost: Realisation A/c Dr. To Bank A/c. If a partner bears his own cost himself, no entry is needed.

Answer 1

The Correct Option is B

Step 1: Idea:
Ask two questions for each case. Did the firm's money go out? Was the cost the firm's own cost or a partner's personal cost?

Step 2: Firm's cost, firm's money (A):
Money leaves the firm, so Bank A/c is credited. The cost is the firm's own, so Realisation A/c is debited. Entry: Realisation A/c Dr. To Bank A/c. This is (III).

Step 3: Firm's cost, partner's money (B):
No firm money leaves. The firm gets a new liability to the partner, so his Capital A/c is credited. The cost is the firm's own, so Realisation A/c is debited. Entry: Realisation A/c Dr. To Partner's Capital A/c. This is (I).

Step 4: Partner's cost, firm's money (C):
Firm money leaves, so Bank A/c is credited. The cost belongs to the partner, so his Capital A/c is debited. This is (IV).

Step 5: Partner's cost, partner's money (D):
No firm money leaves and the cost is not the firm's. There is nothing to record. This is (II).

Step 6: Read off the pattern:
A-III, B-I, C-IV, D-II. Only option 2 has this exact order.

Final Answer:
The pairing is A-III, B-I, C-IV, D-II. \[\boxed{\text{Option 2}}\]