Question

Mention five objective of Realisation

Answer 1

Answer:

Concisely, following are the important objectives of preparing Realisation Account.

1) To close all the books of account.

2) To record transactions relating to the sale of assets and discharge of liabilities.

3) To determine profit or loss due to the realisation of assets and liabilities.

4) To ascertain the profit or loss due to the realisation of assets and liabilities.

5) After bankruptcy and dissolution of a firm by closing all books of accounts, i.e Assets A/cs are creditted while Liability A/cs are debitted.

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