Question

On the dissolution of the partnership firm of Raman, Hari and Suresh, realisation expenses \(₹17,000\) were paid by a debtor of \(₹75,000\) on behalf of the firm. The remaining amount was received from him along with interest of \(₹2,000\) for delayed payment. Realisation Account will be ___________ by ___________.

• A. debited, \(₹17,000\)
• B. credited, \(₹50,000\)
• C. debited, \(₹77,000\)
• D. credited, \(₹60,000\)

Hint:

Expenses paid by third party → debit Realisation A/c.

Answer 1

The Correct Option is A

When a debtor covers realization expenses, this is considered a payment made on behalf of the firm. Consequently, the Realisation Account is debited.