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Gaurav Seth 4 years, 1 month ago
Realization Account is prepared at the time of dissolution of a partnership firm. This account is prepared to know the profit made or loss incurred at the time of dissolution of a firm. All the assets except cash and bank a/c are transferred to the debit side of realization account and liabilities (not capital accounts) are transferred to the credit side of realization account. When assets are sold cash/bank A/c is debited and Realization A/c credited. On settling the liabilities Realization A/c is debited and Cash/Bank A/c is credited. In last if total of credit side exceeds debit side, it means there is profit and that is transferred to partner's capital accounts. In case of loss, the partners' capital accounts are debited and Realization A/c credited.
Format of Realisation Account
Dr. Cr.
Particulars |
Amount (Rs.) |
Particulars | Amount (Rs.) |
Various Assets |
- |
Various Liabilities |
- |
Cash/Bank |
- |
Provision on assets |
- |
Cash/Bank |
- |
Cash/Bank |
- |
Partner's Capital A/c |
- |
Partner 's Capital A/c |
- |
Partner Capital A/c (Profit on realisation distributed in the profit sharing ratio among all the partners) |
- |
Partner Capital A/c |
- |
- | - |
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Akash Kumar 4 years, 1 month ago
4Thank You