It is given that the Cash/Bank balace and Partners Capital balance will not be transferred to the RealisationA/ c but - Accountancy - Dissolution of Partnership Firm

Question

It is given that the Cash/Bank balace and Partners Capital balance
will not be transferred to the RealisationA/ c but in stage 2 it is
transferred to realization A/c Cloud you plz explain

Neha Chopra · Accepted Answer

Dear Student

You are getting confused between transferring Account balance to
realisation account and Carrying transactions through realisation
account
Please note that Opening balance of cash or Bank or Partner's
capital account is not transferred to realisation account However
further any transaction which relates to Assets or
liabilities and Partner or cash is carried out through realisation
and cash or Partners account , You can better understand
with the following journal entries in the examples :
1 Asset taken over by partner : Here in place of Asset ,
realisation account shall be credited because we have transferred
all the assets in realisation
Here journal entry would be

Partner Capital A/c
Dr
xxx

To Realisation A/c

xxx

(Being asset taken over by
partner)

2 Asset sold and cash realised :
Here journal entry would be : â€‹ Here in place
of Asset , realisation account shall be credited because we have
transferred all the assets in realisation

Cash A/c
Dr
xxx

To Realisation A/c

xxx

(Being assets realised in
cash)

Hope this helps
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Regards

Partner Capital A/c	Dr.	xxx
To Realisation A/c			xxx
(Being asset taken over by partner)

Cash A/c	Dr.	xxx
To Realisation A/c			xxx
(Being assets realised in cash)

It is given that the Cash/Bank balace and Partners Capital balance will not be transferred to the RealisationA/ c but in stage 2 it is transferred to realization A/c. Cloud you plz explain.