Question

Assets are transfered to realisation account on what bais?

Answer 1

Answer:

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Answer 2

Answer:

do not transfer the loan by a partner to firm to Realisation account, it remains in its account itself. At the time of settlement, i.e., payment of liabilities, we pay partner’s loan after paying the outside liabilities but before payment of capital.

Following entry is the entry on payment of Partner’s loan:

Date Particulars Amount (Dr.) Amount (Cr.)

Partner’s loan A/c Dr.

To Bank/Cash A/c

(being partners’ loan paid)

3] Partners’ Capital Accounts

If partners take over firm’s assets, we debit it to their Capital Accounts at the agreed value being payment against their capital. If a partner takes over the liability of the firm, we credit it to their Capital Accounts. In addition, we also transfer undistributed profits/losses, reserves and Realisation profit/loss to capital accounts in their profit-sharing ratio. Entries are:

1] On transfer of undistributed profits/losses and reserves: