Compensation to employees paid by the firm amounted to Rs 10000, this liability was not provided for in the b/s - Accountancy - Dissolution of Partnership Firm

Question

Compensation to employees paid by the firm amounted to Rs 10000,
this liability was not provided for in the b/s How do we treat this
when dissolution of the firm is carried out?

Vanita Rana · Accepted Answer

Gopika,

Compensation paid to employees will be debited to Realisation A/c
(expense for the firm) and credited to Cash/Bank A/c (reduction in
cash/bank balance)

Compensation to employees paid by the firm amounted to Rs.10000, this liability was not provided for in the b/s.How do we treat this when dissolution of the firm is carried out?