Question

A] Multiple Choice
1. On amalgamation, Realisation Account is opened.....
(a) in the books of the purchasing firm
(b) in the books of the vendor firm
(c) in the books of both the purchasing and the vendor firm
(d) none of the above​

Answer 1

in the books of the vendor firm

Answer 2

The correct option is (b) in the books of the vendor firm

Explanation:

• When a amalgamation dissolves, a Realization Account is prepared. This account is generated to determine the profit or loss made at the time of a company's demise.
• The Realisation Account is created to record the transactions related to the sale of assets and the discharge of liabilities.
• The principal purpose of a Realisation Account is to determine the profit or loss resulting from the realisation of assets and payment of obligations at the time of a merger firm's dissolution.