Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

At the time of firm's dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :

Options:

Realisation Account

Creditor's Account

Partner's Capital Account

Profit & Loss Account

Correct Answer:

Partner's Capital Account

Explanation:

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)
(General reserve is distributed between partners)