Assertion: Undistributed profits or losses appearing in the balance sheet at the time of admission should be transferred to the old partner’s capital/current account in the new ratio.
Reasoning: Undistributed profits or losses appearing in the balance sheet at the time of admission belong to the old partners as they are earned by them.
Reasoning: Undistributed profits or losses appearing in the balance sheet at the time of admission belong to the old partners as they are earned by them.
Answer & explanation
Correct answer: option 4
Undistributed profits or losses appearing in the balance sheet at the time of admission should be transferred in the old ratio.