Distinguish between : First and Second method of disposal of real… - Vidyadip

Question

Distinguish between : First and Second method of disposal of realisation account.

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Answer

First Method	Second Method
$(1)$ This method is applied in case of the disposal of whole business at a time.	$(1)$ This method is applied when the business is sold out gradually, not at a time.
$(2)$ Under this method, Assets Accounts arc closed by transferring them to Realisation Account in order to close the books of accounts.	$(2)$ Under this method, on the disposal of an asset, the difference, i.e. profit or loss on sale of an asset is transferred to Realisation A/c.
$(3)$ As per this method. Liabilities them to Realisation Account.	$(3)$ As per this method, profit and loss on payment of liabilities is transferred to Realisation A/c.
$(4)$ Under this method, all assets and liabilities accounts are closed.	$(4)$ Under this method, all assets and liabilities accounts are kept open.

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