What are the steps and accounts involved in closing the books for the dissolution of a partnership firm?

Question

Asked on May 30, 2026Accounting

This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.

Accepted Answer · 2026-05-30T03:45:56.689Z

Here are the ledger accounts to close the books for the dissolution of the firm: Step 1: Prepare the Realisation Account. All assets (except cash) are transferred to the debit side at their book values. All external liabilities and provisions are transferred to the credit side at their book values. Assets realized and liabilities paid are recorded. The profit or loss on realisation is then distributed among partners. Assets transferred to Realisation A/c (Debit side): Plant & Machinery: ₹40,000 Patents: ₹6,000 Sundry Debtors: ₹19,000 Stock: ₹25,000 Total:

Accepted Answer · 2026-05-30T03:45:56.689Z

Here are the ledger accounts to close the books for the dissolution of the firm: Step 1: Prepare the Realisation Account. All assets (except cash) are transferred to the debit side at their book values. All external liabilities and provisions are transferred to the credit side at their book values. Assets realized and liabilities paid are recorded. The profit or loss on realisation is then distributed among partners. Assets transferred to Realisation A/c (Debit side): Plant & Machinery: ₹40,000 Patents: ₹6,000 Sundry Debtors: ₹19,000 Stock: ₹25,000 Total:

What are the steps and accounts involved in closing the books for the dissolution of a partnership firm?

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What are the steps and accounts involved in closing the books for the dissolution of a partnership firm?

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