In the case of a dissolution of a firm, accumulated losses are transferred to:
- ARealisation Account in Equal Ratio
- BRealisation Account in Profit Sharing Ratio
- CCapital Accounts in Equal Ratio
- DCapital Accounts in Profit Sharing Ratio
Solution & Step-by-step Explanation
Accumulated losses (unabsorbed balance sheet values like debit P&L or deferred revenue) are not routine business assets to be closed to the Realisation Account. They must be directly cleared into the Partners' Capital Accounts, debiting them in their old Profit Sharing Ratio.