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Process of Realisation

Unrecorded as...

Question

Unrecorded asset when realised is credited to ____________ .

A

Realisation Account

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B

partners' Capital Accounts

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C

None of the above

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D

Only option (A)

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Solution

The correct option is A Realisation Account
Unrecorded assets are those assets that have been completely written off but are still physically present in the business. There is no requirement to show these assets in the books before they are sold off. Hence, these assets are directly credited to the Realisation account at the time of dissolution of the firm.

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An unrecorded asset realised at the time of realisation is credited to -

Unrecorded Asset realised at the time of dissolution is debited to __________ and credited to ___________.

Q. A, B and C were in partnership sharing profits and losses in the ratio of 2 : 1 : 1. They decided to dissolve the partnership. On that date of dissolution, Sundry Assets (including cash ₹ 5,000) amounted to ₹ 88,000, assets realised ₹ 80,000 (including an unrecorded asset which realised ₹ 4,000). A contingent liability on account of bills discounted ₹ 8,000 was paid by the firm. The Capital Accounts of A, B and C showed a balance of ₹ 20,000 each.
Prepare Realisation Account, Partners' Capital Accounts and Cash Account.

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