Manvi In: 1. Financial Accounting > Partnerships What are unrecorded liabilities? What are unrecorded liabilities? Share Facebook You must login to add an answer. Username or email* Password* Captcha* Remember Me! Forgot Password? Need An Account, Sign Up Here 1 Answer Voted Recent AbhishekBatabyal Helpful Pursuing CA, BCOM (HONS) 2021-10-19T15:03:21+00:00Added an answer on October 19, 2021 at 3:03 pm This answer was edited. As the name suggests, unrecorded liabilities means the liabilities that a firm fails to record in its book of accounts. Usually, a firm gets to know about its unrecorded liabilities when it is about to get dissolved. What happens is that upon hearing that a firm is going to dissolve in near future, its creditors and lenders report to the firm about their dues. At that time, a firm may get to know that it had failed to record some liabilities in its books and it has settled them now. We know that when a partnership firm is dissolved, a realisation account is created to which all the assets and liabilities of the firm are transferred. Entries are as given below: Realisation A/c Dr. ₹ Amt To Assets A/c ₹ Amt ( Asset transferred to realisation account) Liabilities A/c Dr. ₹ Amt To Realisation A/c ₹ Amt (Liabilities transferred to realisation account) Hence, for transferring unrecorded liabilities, the procedure is the same for the recorded liabilities: Unrecorded Liabilities A/c Dr. ₹ Amt To Realisation A/c ₹ Amt ( Unrecorded liabilities transferred to realisation account) Then to pay off the unrecorded liability the entry is: Realisation A/c Dr. ₹ Amt To Cash / Bank A/c ₹ Amt (Unrecorded liabilities paid off) That’s it, I hope I was able to make you understand. 0 Share Share Share on Facebook Share on Twitter Share on LinkedIn Share on WhatsApp Related Questions What are some examples of deferred revenue expenses? Are brands intangible assets? What comes in debit side of Realisation account? What is recorded in the Realisation account? What is not included in Realisation account? What is recorded on the credit side of a Realisation account? Can accounts payable have a debit balance?