Cyclopedia of Commerce, Accountancy, Business Administration, v. 05 (of 10)

by American School of Correspondence

REALIZATION AND LIQUIDATION ACCOUNTS

9. A realization and liquidation account is an account showing the result of the liquidation of a business or an estate.

It is debited with the total assets as shown by the balance sheet or statement of affairs, and is credited with all liabilities to outside creditors. The account is subsequently credited with the amounts realized on assets, and debited with liabilities liquidated together with the expenses of realization and cost of liquidation.

Realization and liquidation accounts are frequently prepared in the form of an account of charge and discharge as shown in the preceding pages for executor's accounts.