Question:
On dissolution of firm all assets and liabilities are transferred to the realization account at their _________ values. (book/market)
On dissolution of firm all assets and liabilities are transferred to the realization account at their _________ values. (book/market)
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During dissolution, assets and liabilities are transferred to the Realization Account at their book values, not their market values.
Updated On: Jan 5, 2026
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Solution and Explanation
Step 1: Understanding the dissolution process.
When a partnership firm dissolves, all assets and liabilities are transferred to the Realization Account at their book values, which reflects the values recorded in the books of accounts.
Step 2: Conclusion.
The correct answer is book, as the assets and liabilities are recorded at their book values during dissolution.
When a partnership firm dissolves, all assets and liabilities are transferred to the Realization Account at their book values, which reflects the values recorded in the books of accounts.
Step 2: Conclusion.
The correct answer is book, as the assets and liabilities are recorded at their book values during dissolution.
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