During dissolution of a partnership, realization expenses paid by a partner on behalf of the firm are:
A. Debited to Partner's Capital A/c, Credited to Cash A/c
B. Debited to Cash A/c, Credited to Realisation A/c
C. Debited to Realisation A/c, Credited to Partner's Capital A/c
D. Ignored in the books
Answer: Option C
Solution (By JKSSB Mock Tests)
Because the firm owes the partner for this expense, it is charged to Realisation (Debit) and credited to the Partner's Capital account.
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