In the case of the Dissolution of partnership firm, which accounts are opened:(A) Realization Account(B) Revaluation Account(C) Partners Capital Account(D) Bank AccountChoose the correct answer from the options given below:
- A(A), (B) and (D) only
- B(A), (B) and (C) only
- C(A), (B), (C) and (D)
- D(A), (C) and (D) only
Solution & Step-by-step Explanation
At the time of the dissolution of a partnership firm, the business is completely wound up. The following accounts are prepared to close the books of accounts:Realization Account (A): To record the sale of assets and payment of external liabilities.Partners Capital Account (C): To adjust and settle final balances due to or from partners.Bank/Cash Account (D): To record all cash inflows from asset realizations and outflows for settlement of liabilities and capitals.Revaluation Account (B) is prepared during reconstitution of a firm (like admission, retirement, or change in profit sharing ratio), not during complete dissolution.Hence, (A), (C), and (D) only are opened.