Question

White, Shaun and Todd were partners in a firm sharing profits and losses equally. Shaun’s wife had advanced a loan of ₹ 1,00,000 to the firm. The firm was dissolved. Shaun’s wife’s loan had already been transferred to Realisation account. The account credited to discharge Shaun’s wife’s loan will be :

• A. Shaun’s capital account
• B. Bank account
• C. Realisation account
• D. Shaun’s loan account

Hint:

In dissolution, when liabilities are settled, bank/cash account is credited and liability is debited.

Answer 1

The Correct Option is B

Shaun’s wife’s loan was already transferred to the Realisation account.
To discharge it, the firm will pay her, resulting in a credit to the Bank account.
The Bank account is credited when cash is disbursed to settle liabilities.Final Answer: Bank account