Question

On dissolution of firm all assets and liabilities are transferred to the realization account at their _________ values. (book/market)

Hint:

During dissolution, assets and liabilities are transferred to the Realization Account at their book values, not their market values.

Answer 1

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.