Realisation account meaning in Hindi revolves around the concept of “निर्वतन खाता” (nirvatan khata). This account plays a crucial role during the dissolution of a partnership firm or a company’s liquidation, providing a clear picture of the profit or loss incurred while selling off assets. Understanding its nuances is essential for anyone involved in such financial proceedings.
What is a Realisation Account (निर्वतन खाता)?
A realisation account, known as निर्वतन खाता in Hindi, is a temporary account prepared during the winding up of a partnership firm or company. It records the sale proceeds of assets, expenses incurred during the realization process, and ultimately determines the profit or loss from selling off these assets. This profit or loss is then distributed among the partners or shareholders according to the partnership deed or company’s articles of association. Think of it as a final accounting of what was gained or lost during the closing down process.
The Purpose of a Realisation Account (निर्वतन खाता का उद्देश्य)
The primary purpose of a realisation account is to ascertain the difference between the book value of assets and their actual realised value. This helps determine the profit or loss made on realisation, which is an essential step in the fair distribution of remaining funds amongst stakeholders. It offers transparency and ensures all parties involved understand the financial implications of the dissolution.
How to Prepare a Realisation Account (निर्वतन खाता कैसे तैयार करें)
Creating a realisation account involves several key steps. All assets of the dissolving entity are transferred to the debit side of the account at their book values. The proceeds from the sale of these assets are then credited. Any expenses incurred during the sale, such as auctioneer fees or legal costs, are debited. The difference between the debit and credit sides will reveal the profit or loss on realisation.
Realisation Account vs. Profit & Loss Account (निर्वतन खाता बनाम लाभ और हानि खाता)
While both deal with profits and losses, a realisation account is distinct from a profit & loss account. A profit & loss account shows the operating results of a business over a specific period, while a realisation account deals specifically with profits or losses arising from the sale of assets during the closure of a business. It’s a snapshot of the final chapter, not the ongoing story.
Key Components of a Realisation Account (निर्वतन खाता के मुख्य घटक)
- Assets: All assets, including fixed assets and current assets, are recorded on the debit side.
- Liabilities: Secured and unsecured liabilities are not directly recorded in the realisation account, but their settlement affects the final outcome.
- Realisation Expenses: Costs associated with selling assets, such as legal fees or auction expenses, are debited.
- Sale Proceeds: The amounts received from selling the assets are credited.
Example: Realisation Account in Action (निर्वतन खाता का उदाहरण)
Imagine a partnership firm dissolving. Their building, with a book value of ₹10,00,000, is sold for ₹12,00,000. The realisation account will show a credit of ₹12,00,000 and a debit of ₹10,00,000, indicating a profit of ₹2,00,000 on the building’s sale.
Conclusion
Understanding the realisation account meaning in Hindi (निर्वतन खाता) is crucial for navigating the financial complexities of business dissolution. It provides a clear picture of the financial implications and ensures a transparent and equitable distribution of remaining funds among stakeholders. By meticulously recording asset sales, expenses, and resulting profits or losses, the realisation account serves as a vital tool in bringing a business chapter to a close.
FAQ
- What is the Hindi word for Realisation Account? The Hindi word for Realisation Account is निर्वतन खाता (nirvatan khata).
- When is a Realisation Account prepared? A Realisation Account is prepared during the winding up or liquidation of a business.
- What is the purpose of a Realisation Account? The purpose is to determine the profit or loss from selling assets during the closure of a business.
- What is recorded on the debit side of a Realisation Account? The book value of assets and any expenses related to their sale are recorded on the debit side.
- What is recorded on the credit side of a Realisation Account? The proceeds from the sale of assets are recorded on the credit side.
- How is the profit or loss on realisation calculated? The difference between the total of the debit side and the total of the credit side represents the profit or loss on realisation.
- Is a Realisation Account the same as a Profit & Loss Account? No, they are different. The P&L account shows operating results, while the Realisation Account shows the profit/loss from asset sales during liquidation.
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