Question

Unrecorded liabilities when paid are shown in:

• A. Debit side of Realisation A/c
• B. Debit side of Bank A/c
• C. Credit side of Realisation A/c
• D. Credit side of Bank A/c

Hint:

Always remember: Payment of any liability (recorded or unrecorded) is shown on the debit side of Realisation A/c.

Answer 1

The Correct Option is A

Step 1: Concept of unrecorded liabilities.
During dissolution, sometimes a liability may not have been recorded earlier. When the firm pays such liabilities, it is treated as an expense of dissolution.
Step 2: Treatment in Realisation A/c.
- Debit side of Realisation A/c = expenses, payments, and settlement of liabilities.
- Credit side = proceeds of sale of assets or any income.
Step 3: Why debit?
Since payment of unrecorded liabilities reduces the firm’s resources, it is shown on the debit side of Realisation A/c.
Step 4: Conclude.
Thus, unrecorded liabilities paid are recorded on the Debit side of Realisation A/c.
Final Answer: \[ \boxed{\text{Debit side of Realisation A/c}} \]