Question

At the time of dissolution of a partnership firm, fictitious assets are transferred to the:

• A. Credit of Realisation A/c
• B. Debit of Realisation A/c
• C. Credit of Partners’ Capital A/c
• D. Debit of Partners’ Capital A/c

Answer 1

Answer: (B)

Debit of Realisation A/c

Answer 2

At the time of dissolution of a partnership firm, fictitious assets, which are not real and do not have any value, are written off. Therefore, they are transferred to the Debit of Realisation Account. This is because the Realisation Account is used to account for all the assets and liabilities of the firm at the time of dissolution, and fictitious assets reduce the overall capital of the firm.