Question

amount realised from sale of assets is recorded in-
(a)A. Debit side of Realisation A/C
(b)Credit side of Realisation A/C
(c)Liability side of Balance sheet
(d)Assets side of Balance sheet
​

Answer 1

The correct answer is B

Explanation:

• Realisation account is the account which is defined as the account that is opened through the firm when the firm is getting dissolved in order to record the profit made from sale as well as loss suffered on the liabilities settlement.
• So, when there is dissolution of firm, all the assets as well as liabilities are transferred to the account of realisation. And any amount which is realised from the sale of assets will be posted to the credit side of the realisation account.
• The journal entry which is to be made in case of sale of assets is as:

Bank Account A/c......................................Dr   XXXX

           To Realisation Account A/c..............Cr   XXXX

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