If a partner takes over an unrecorded liability during dissolution, the accounting entry is:
A. Debit Liability A/c, Credit Cash
B. Debit Realisation A/c, Credit Partner's Capital A/c
C. No entry is required
D. Debit Partner's Capital A/c, Credit Realisation A/c
Answer: Option B
Solution (By JKSSB Mock Tests)
The firm is assuming a cost (Debit Realisation) and compensating the partner who took the liability (Credit Partner's Capital).
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