Which statement is not false, in respect of the dissolution of a partnership firm :-

When a partner takes over an unrecorded asset during dissolution:

The unrecorded asset must first be brought into the books. Since it's an asset that wasn't recorded earlier, it needs to be introduced in the Realization Account.

Journal Entry:

Partner's Capital A/c Dr.

To Realization A/c

The Realization Account is credited because:

• The unrecorded asset is being transferred out of the firm
• The partner is taking it over as part of settlement
• The value reduces what the partner would otherwise receive

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Why other options are false:

Option 2: Partner's Capital Account is debited (not credited) when taking over an unrecorded asset, as shown in the entry above.

Option 3: When a partner takes over a recorded liability, the entry is:

Realization A/c Dr.

To Partner's Capital A/c

The Realization Account is debited (not credited) because the firm is relieved of the liability.

Option 4: When a partner takes over an unrecorded liability, the entry is:

Realization A/c Dr.

To Partner's Capital A/c

The Realization Account is debited (not credited) as the partner is taking responsibility for a liability that should have been the firm's obligation.

The correct answer is Option 1 as it is the only true statement.