Question

if cash balance is taken over by limited company. it is transferred to 1 realisation account 2 revaluation account 3 profit and loss account 4 none of above ​

Answer 1

Answer:

is taken over by limited company. it is transferred to 1 realisation account 2 revaluation account 3 profit and loss account 4 none of above

Answer 2

Answer:

Realisation account. (1)

Explanation:

• When a company dissolves, all  books  are closed, all assets are sold, and all liabilities are paid off. A nominee account, called a realisation account, is opened to record the sale of assets and the settlement of liabilities.
• The main purpose of opening a clearing account is to determine the profit or loss from the liquidation of assets and liabilities. A realization account records the sale of an asset at its realization value. Payments to liabilities (creditors) are recognized at the settlement amount.

Primary Purpose of Establishing Realization Accounts

(i) Closure of all ledgers.

(ii) Recording of transactions relating to the sale of assets and the settlement of liabilities.

(iii) Determining gains or losses on the realization of assets and liabilities.

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