JAMB Accounts Principles of Accounts 2023 Paper

Concept:Dissolution expenses are costs paid to close a partnership, so they are recorded through the Realization account.Explanation:When the firm pays dissolution expenses, it means cash is leaving the business.This expense is a cost of realizing the assets and settling the firm.Therefore, the Realization account is debited to record the expense.The Cash account is credited because cash is paid out.This follows the rule: debit all expenses, credit what goes out.Thus, the entry is Dr: Realization account; Cr: Cash account.Answer:C. Dr: Realization account; Cr: Cash account.