In the case of the Dissolution of partnership firm, which accounts are opened:

(A) Realization Account

(B) Revaluation Account

(C) Partners Capital Account

(D) Bank Account

Choose the correct answer from the options given below:

When a partnership firm is dissolved, the accounting treatment differs from reconstitution scenarios.

Realization Account is opened to record the disposal of all assets and settlement of all liabilities during dissolution. All assets (except cash/bank) are transferred to this account, and it helps determine profit or loss on realization.

Partners' Capital Accounts continue to be used during dissolution. These accounts are debited or credited with the partners' share of realization profit/loss, and finally settled by paying off their remaining balances.

Bank Account is maintained throughout the dissolution process to record all cash receipts from sale of assets and cash payments for settlement of liabilities and partners' dues.

Revaluation Account is specifically used during reconstitution of partnership (admission, retirement, or death of a partner) to adjust the book values of assets and liabilities to their current values. This account is not opened during dissolution because in dissolution, we use the Realization Account instead.

During dissolution, the focus is on selling off assets and settling liabilities to wind up the business completely, not on revaluing them for continuing partners.

Therefore, the accounts opened during dissolution are (A), (C) and (D) only.

Correct Answer: Option 4