At the time of dissolution of the partnership firm, Deferred Revenue Expenditure (Advertisement Expenditure) is transferred to which account:
Answer & explanation
Correct answer: option 2
* For transfer of accumulated profits in the form of general reserve to partners’ capital accounts in their profit sharing ratio:
General Reserve A/c Dr.
To Partners’ Capital A/c (individually)
* For transfer of fictitious assets, if any, to partners’ capital accounts in their profit sharing ratio:
Partners’ Capital A/c (individually) Dr.
To Fictitious Asset A/c