Question

5. Give the journal entry for sale of an asset on Dissolution of a Firm. ​

Answer 1

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ANSWER

In case of dissolution of firm, all assets and liabilities are transferred to Realization Account. Amount received against the sale of assets will be credited to realization account and amount paid against any liability should be debited to realization account.

Accounting entries will be as under:

Transfer of assets to realization account:

Realization A/c Dr.

To Assets Account

Sale of Assets:

Bank Account Dr.

To Realization Account

Answer 2

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