Unrecorded liability, when paid by a firm on its dissolution is debited to:

The correct answer is C. Realisation Account.

An unrecorded liability is a liability that a company has incurred but has not yet recorded in its accounting records. When a company dissolves, it is responsible for paying off all of its liabilities, including unrecorded liabilities. The unrecorded liability is debited to the Realisation Account, which is a temporary account used to record the gains and losses from the dissolution of a company. The credit to the Realisation Account is to the appropriate asset account, such as Accounts Payable.

The other options are incorrect for the following reasons:

• Option A: Partner’s Capital is an account that is used to record the capital contributions and withdrawals of partners in a partnership. It is not used to record liabilities.
• Option B: Unrecorded Liability Account is a temporary account that is used to record unrecorded liabilities when a company dissolves. It is not used to record the payment of unrecorded liabilities.
• Option D: None of these is the correct answer.