Question : On dissolution of the firm, Bank overdraft is transferred to ....
Option 1: Bank account
Option 2: Realization account
Option 3: Either 1 and 2
Option 4: Partner's capital account
Answer (1)
18th Jan, 2024
Correct Answer: Either 1 and 2
Solution : Answer = Either 1 or 2
On dissolution of a firm, Bank overdraft is transferred to the Realization Account. This transfer is done because a bank overdraft is considered a liability of the firm and needs to be accounted for in the Realization Account along with other liabilities during the dissolution process.
Hence, the correct option is 3.
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