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Accounting entry for dissolution expenses is

Accounts - Principles of Accounts
JAMB 2023

Accounting entry for dissolution expenses is

  • A. Dr : Partnership account ;Cr: Realization account
  • B. Dr: Revaluation account; Cr: Partnership account
  • C. Dr: Realization account; Cr: Cash account
  • D. Dr: Partners current account; Cr: Realization account
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Correct Answer: Option C
Explanation

When dissolution expenses are paid, the Realization account is debited because it represents the expenses related to the dissolution of the partnership. The Cash account is credited because cash is going out of the business to pay for these expenses. Hence, the correct accounting entry is 'Dr: Realization account; Cr: Cash account'.


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