Partnership

Dissolution

Medium

common

Unrecorded Liabilities when paid are shown in:

Debit of Realisation Account

Debit of Bank Account

Credit of realisation Acount

Credit of Bank Account

✅ Correct Option: 1,4

When unrecorded liabilities are discovered during dissolution and subsequently paid, the transaction affects two accounts:

Journal Entry:

Realisation A/c ... Dr.

To Bank A/c

Explanation:

Unrecorded liabilities are those obligations of the firm that were not recorded in the books earlier but are discovered during the dissolution process.

When these liabilities are paid:

Realisation Account (Debit): All payments made during dissolution, including unrecorded liabilities, are debited to the Realisation Account. This is because the Realisation Account records all losses, expenses, and payments made while settling the firm's affairs.

Bank Account (Credit): Since the payment is made through bank, the bank balance decreases. Any decrease in bank balance is shown on the credit side of the Bank Account.

Important Note: If the question had asked about unrecorded liabilities when they are discovered (not paid), then only the Realisation Account would be debited and the liability account would be credited. However, since the question specifically mentions "when paid," both Bank Account credit and Realisation Account debit are involved.

The options 1 and 4 together represent the complete double entry for payment of unrecorded liabilities.

2026: 13 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Realisation expenses are incurred and paid by the firm	(I) No Entry
(B) Realisation expenses are paid by a partner on behalf of the firm	(II) Realisation A/c Dr.\nTo Bank A/c
(C) Partner himself pays the realisation expenses	(III) Partner's Capital A/c Dr.\nTo Bank A/c
(D) Partner has agreed to bear the realisation expenses but expenses are paid by the firm	(IV) Realisation A/c Dr.\nTo Partner's Capital A/c

Choose the correct answer from the given options below:

2025: 14 May Shift 2

When realisation expenses are paid by the firm on behalf of a partner, which account will be debited :

2025: 29 May Shift 2

Dissolution of a partnership firm may be ordered by the court on the following grounds:

(A) when a partner becomes insane.

(B) when a partner becomes permanently incapable of performing his duties as partner.

(D) when it is regarded just and equitable by the court.

Choose the correct answer from the options given below:

2025: 2 June Shift 2

Anubha looked after the dissolution work for remuneration of Rs. 8,500 and agreed to bear dissolution expenses upto Rs. 6,000. Actual expenses paid by her were Rs. 7,600. What will be the journal entry for remuneration payable to Anubha?

(A) Realisation A/c is debited by 8,500

(B) Anubha's Capital A/c is credited by 8,500.

(D) Anubha's Capital is credited by13,600.

Choose the correct answer from the options given below:

2025: 27 May Shift 1

Partner's current accounts are transferred to respective________ partner's accounts.

2025: 3 June Shift 1

When a partnership firm is being dissolved, the private property of any partner shall be applied first, in payment of __________ and the surplus, if any, may be utilised for payment of __________, in case the firm's liabilities exceed the firm's assets.

Unrecorded Liabilities when paid are shown in:

Solution

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