When a firm is dissolved, the Balance of Investment Account and Balance of Investment Fluctuation Fund Account, shown by Firm's Balance Sheet are transferred into _________ and into _________ respectively:-
- ADebit Side of Realisation Account, Credit side of Realisation Account
- BCredit Side of Realisation Account, Debit side of Realisation Account
- CCredit Side of Realisation Account, Debit side of Capital Account
- DCredit Side of Realisation Account, Credit side of Current Account
Solution & Step-by-step Explanation
During dissolution, Investment is an asset and its ledger balance is closed by transferring it to the Debit side of the Realisation Account. The corresponding Investment Fluctuation Fund, being a provision setup against that asset, is simultaneously transferred to the Credit side of the Realisation Account.