Question

Amount realised from sales of assets, on dissolution of firm is recorded in:

• A. Realisation A/c
• B. Liabilities A/c
• C. Expenses A/c
• D. None of these

Hint:

Always remember: In Realisation A/c, \textbf{book value of assets} = debit side, while \textbf{cash from asset sales} = credit side.

Answer 1

The Correct Option is A

Step 1: Recall Realisation A/c structure.
Realisation A/c is prepared to ascertain profit or loss on dissolution. It records both transfer of assets and proceeds of sale.
Step 2: Sale proceeds.
When assets are sold, the amount realised (cash or bank) is recorded on the Credit side of Realisation A/c.
Step 3: Why not Liabilities or Expenses?
- Liabilities A/c records obligations, not asset sales.
- Expenses A/c records costs, not sales.
Step 4: Conclude.
Thus, sale proceeds of assets on dissolution are credited to Realisation A/c.
Final Answer: \[ \boxed{\text{Realisation A/c}} \]