Question

On dissolution of the firm, Partners’ Capital Accounts are closed through:

• A. Realisation A/c
• B. Drawings A/c
• C. Bank A/c
• D. Loan A/c

Hint:

At dissolution, partners’ capital accounts are settled by paying them through Bank A/c (final settlement).

Answer 1

The Correct Option is C

Step 1: Settlement process at dissolution.
After assets are realised and liabilities are paid, the remaining balance (profit or loss) is transferred to partners’ capital accounts.
Step 2: Final closure of capital accounts.
- If partners are to be paid cash, settlement is done through Bank A/c.
- Bank A/c is credited when cash is paid to partners.
- Partners’ Capital A/c is debited when their dues are settled.
Step 3: Conclude.
Therefore, partners’ capital accounts are finally closed through Bank A/c.
Final Answer: \[ \boxed{\text{Bank A/c}} \]