In case of a firm’s dissoultion, the capital accounts are finally closed by

The correct answer is A. Realisation Account.

A Realisation Account is a temporary account used to record the sale of assets and the settlement of liabilities in the process of dissolving a business. The capital accounts are finally closed by transferring the balance of the Realisation Account to the capital accounts of the partners.

The other options are incorrect because:

• Profit and Loss Account is used to record the income and expenses of a business for a particular period of time. It is not used to close the capital accounts of a business.
• Cash or Bank Account is a permanent account that is used to record all cash and bank transactions of a business. It is not used to close the capital accounts of a business.
• Profit and Loss Appropriation Account is used to record the appropriation of profit or loss for a particular period of time. It is not used to close the capital accounts of a business.