Asset Transfer in Partnership Dissolution

Steps:

• Realisation Account handles asset disposals during dissolution, including transfers to partners.
• Partner's capital account is debited to reduce their claim by the asset's value taken.
• Realisation Account is credited to record the asset's removal from the firm's books.
• This entry settles part of the partner's dues without cash payment.

Why B is correct:

• Per partnership accounting standards, transferring an asset to a partner debits their Capital Account (settling dues) and credits Realisation Account (closing the asset transfer).

Why the others are wrong:

• A: Reverses the entry, incorrectly crediting the asset account, which increases it instead of removing it.
• C: Opposes the flow; debiting Realisation would imply adding an asset, not distributing one.
• D: Bypasses Realisation Account, directly adjusting the asset to capital, violating dissolution procedures.

Final answer: B