• A. partners capital account
  • B. revaluation account
  • C. partners current account
  • D. realization account ✓


The answer to the question is: D. realization account

When a partnership is dissolved, the partners need to account for various expenses and assets as part of the dissolution process. One of the accounts involved in this process is the realization account. The realization account is used to record all the assets that are sold, liabilities that are paid off, and any other expenses incurred during the dissolution of the partnership.

When dissolution expenses are incurred, they are credited to the realization account. This means that any expenses related to the dissolution of the partnership, such as legal fees, accounting fees, or any other costs associated with winding up the business, would be recorded as a credit in the realization account.

The realization account is an important part of the dissolution process as it helps to ensure that all expenses and assets are properly accounted for before the final distribution of any remaining funds to the partners. By crediting dissolution expenses to the realization account, the partners can accurately track and allocate these costs as part of the overall winding up of the partnership.

In summary, when dissolution expenses are incurred in a partnership, they are credited to the realization account as part of the process of winding up the business and distributing any remaining assets to the partners.

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