Question

Why is Realistion Account opened? (Answer in one sentence)

Answer 1

to ascertain the profit or loss due to the realisation of assets.

Answer 2

Answer:

Realistion Account opened

It records actual realisation of assets and liabilities

It is prepared at the time of dissolution of a firm

* Transferring all the assets except cash or bank account to the debit side of the account.

* In this account all the items are assets and liabilities are recorded

* It main objective is to be determine the  net profit / loss on realisation of assets and settlement of liabilities

* Transferring all the liabilities except partner' s loan account and partner' capital account to all the credit side of the account