It is said that while transferring assets and liabilities in realisation account it is written off as opposite entry is passed but while transferring in p/l or trading account also we pass the opposite entry . Is that also means we are writing off? What is the difference between these two? Clarify
Dear Student
Let us understand the difference between transferring to realisation and transferring to P/L .
Transferring to Realisation means : We close all assets and liabilities accounts as they would be disposed off . In realisation all accounts are transferred to close them and realise their values or pay the liabilities and the net profit or loss is transferred to Partners capital account .
Transferring to P/L means : In P/L we transfer all the nominal accounts to close them so that we can get Net profit or losses.
Therefore from the above it can be understood that way of transferring accounts to Realisation or P/L is same but both have different purposes.
Hope this helps
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Regards
Let us understand the difference between transferring to realisation and transferring to P/L .
Transferring to Realisation means : We close all assets and liabilities accounts as they would be disposed off . In realisation all accounts are transferred to close them and realise their values or pay the liabilities and the net profit or loss is transferred to Partners capital account .
Transferring to P/L means : In P/L we transfer all the nominal accounts to close them so that we can get Net profit or losses.
Therefore from the above it can be understood that way of transferring accounts to Realisation or P/L is same but both have different purposes.
Hope this helps
Please get back to us for any query
Keep posting
Regards