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

The Correct Option is B

At the time of the dissolution of a partnership firm, fictitious assets (such as preliminary expenses, advertising expenses, and deferred revenue expenditures) are not real assets and have no market value. These assets must be written off during the dissolution process.

• Fictitious assets are transferred to the Realisation Account on the debit side. This is because they are being written off, and the Realisation Account is used to record all the assets and liabilities being realized or settled during dissolution.

Therefore, the correct answer is: (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.