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Dissolution of firm - class-XI
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Where it is agreed that a partner will be paid a lump sum amount for dissolution of the payment is made by the firm, the payment is debited to ____________ .
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A
Realisation Account
💡 Explanation:
The lump sum amount paid by the partner is an expense for the firm since it has to be returned to the partner later on. All expenses need to be debited to the realisation account at the time of dissolution, hence, the payment is debited to the Realisation account at the time of dissolution of the firm.