The accumulated profits and reserves are transferred to:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Partners’ Capital Accounts
Accumulated profits and reserves are past profits not yet distributed, so on dissolution they are credited to the partners’ capital accounts in their profit sharing ratio; they are not assets to be sold through the Realisation Account.
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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