Page 218 - VIRANSH COACHING CLASSES

Realisation Account at their Book value or Balance sheet value. All the Assets are transferred on the
debit side and all the Liabilities are transferred on credit side of Realisation Account.
Specimen Journal Entries :
1. For Transferring Assets to Realisation Account :
Realisation A/c. ...............Dr. (With the book value or Balance Sheet value)
To Assets A/c (Individually)
(Baing transfer of various assets at book value to Realisation Account.)

2. For Transferring Liabilities to Realisation Account :
All the liabilities to third parties are closed by transfer to Realisation Account.
Sundry Creditors A/c. ............................... Dr. At
Bills Payable A/c .................................. Dr. Book
Bank Overdraft A/c ................................ Dr. Values
Outsider’s Loan A/c (other than partner) ............... Dr.
Outstanding Expenses A/c ........................... Dr.
To Realisation A/c
(Being transfer of liabilities to Realisation Account.)
3. For Transfer of Provision against closing Assets :
The various assets against which provision i. e. R. D. D., Provision for Depreciation, Contingency
Reserve etc exist should be transferred separately to the Realisation Account because these are
separate accounts in the Books. The entry will be.
Provision for Doubtful Debts A/c ..................... Dr.
Provision for Discount A/c .......................... Dr. (At
Provision for Depreciation A/c ....................... Dr. Book
Contingency Reserve A/c ........................... Dr. Value)
Joint Life Policy Reserve A/c ........................ Dr.
Investment Fluctuation Fund A/c ...................... Dr.
To Realisation A/c
(Being transfer of various provisions to Realisation Accounts)

4. For Transfer of Accumulated Profit and Reserves :
Accumulated profits means undistributed e. g. General Reserve, Reserve Fund, Profit and loss
A/c (credit balance). It should be transferred to Partners Capital Account or Partners Current
Account in their profit sharing ratio. The entry is :
General Reserve A/c ............................... Dr. (In Profit
Reserve Fund A/c .................................. Dr. Sharing
Profit and Loss A/c ................................. Dr. Ratio)
To all Partners Capital / Current A/c.
(Being accumulated Profit and Reserves transferred to all partners Capital / Current A/c in
their profit sharing ratio.)

5. For Transfer of Accumulated Loss :
Accumulated loss are the losses suffered by the partnership firm not distributed among the
partners e. g. Profit and Loss a/c debit balance such Accumulated Loss is transferred to Partners
Capital Account or Partners Current Account. The entry will be :

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