Question

At the time of dissolution of firm, book value of assets is recorded in which side of Realisation Account?

• A. Debit
• B. Credit
• C. Liability
• D. None of these

Hint:

In Realisation A/c: Book value of assets → Debit side; Proceeds from sale of assets → Credit side.

Answer 1

The Correct Option is A

Step 1: Transfer of assets to Realisation A/c.
When dissolution occurs, all assets (except cash, bank, and fictitious assets) are transferred to Realisation A/c at their book value.
Step 2: Where do assets appear?
In Realisation A/c: - Debit side = Book value of assets transferred. - Credit side = Sale proceeds (realisation) from assets.
Step 3: Explanation.
Book value of assets is debited to Realisation A/c because assets are being closed from the balance sheet and transferred.
Step 4: Conclude.
Thus, book value of assets is shown on the Debit side of Realisation A/c.
Final Answer: \[ \boxed{\text{Debit}} \]