On dissolution of a firm, bank overdraft is transferred to:
- ACash Account
- BBank Account
- CRealisation Account
- DPartner's Capital Account
Solution & Step-by-step Explanation
During the dissolution of a partnership firm, a bank overdraft is treated as an external financial liability of the firm. Like all other third-party external liabilities, it must be closed out by transferring it to the credit side of the Realisation Account.