Question

Write a word/term/phrase which can substituted each of the following statements:
An account opened to find out the profit or loss on sale of asset and settlement of liabilities.

Answer 1

We prepare the Realisation A/c to find out the profit or loss on sale of the assets and settlement of liabilities. It is prepared in case of the dissolution of the partnership firm. All the assets and liabilities are transferred to this account and later any cash realised in respect of any asset or paid for liability is also routed through this account.