JAMB Commerce 2006 Question 30

Question 30

Business Units

A liquidator's fee is to be charged to the

  1. A.realization account
  2. B.trading account
  3. C.revaluation account
  4. D.reconstruction account.
Show the answer and explanation

Answer: A (realization account)

Explanation

When a business is wound up, the costs of winding up, including the liquidator's fee, are debited to the realisation account.