how to calculate realisation a/c??? any easy method to keep in our memory in dissoution of partnership firm
The realisation a/c is made generally in the condition of closing the firm.
it is necessary to sell all the assets and pay all the liabilities of the firm.
the balance of assets is DR. as you know.when we sell an asset we have to write it in the debit side of realisation a/c and when we pay a liability we have to write it in the credit side of this a/c.
because by seeling the asset we will get cash. so it would be write in the credit side of this a/c(BY CASH A/C).And when we pay a liability the cash will go so we would have to write it in the debit side of this a/c(TO CASH A/C).
Finally we distribute the balance of this a/c as profit or loss.The debit balance of this a/c will loss for partners and the credit balance of this a/c will the profit...