Question

Which of the following will not be shown in Realisation Account?

• A. Unrecorded Asset realised
• B. Unrecorded Liabilities paid off
• C. Partner’s Loan to the firm
• D. Realisation Expenses

Hint:

Realisation Account records only assets, liabilities, and expenses related to dissolution, not partners’ loans.

Answer 1

The Correct Option is C

Step 1: Understand Realisation Account
The Realisation Account documents all assets and liabilities connected to the dissolution of a partnership firm.
It includes assets realized that were not previously recorded on the balance sheet (A) and liabilities paid off that were also unrecorded (B).
Expenses incurred during the dissolution process, known as realisation expenses (D), are also debited to this account.
Crucially, a Partner's Loan to the firm (C) is treated as a separate liability and is not included in the Realisation Account.
Step 2: Conclusion
Therefore, a Partner's Loan to the firm is excluded from the Realisation Account.