At the time of reconstitution of the partnership firm, recording of an unrecorded asset will lead to..........
Answer & explanation
Correct answer: option 2
The correct answer is option 2- Gain to existing partners.
When we record an unrecorded asset during the reconstitution of a partnership firm, it means recognizing an asset that wasn't accounted for before. The firm is gaining by acknowledging an asset it didn't have on the books. Firm gain will be gain for the partners.