If there is no claim against workmen compensation reserve, it is ....…

If there is no claim against workmen compensation reserve, it is ............. at the time of admission of a partner.

Fill in the blank with the correct answer from the option given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → Credited to old Partner’s Capital A/c

Workmen Compensation Reserve is kept aside out of past profits to meet claims of workers. When no claim exists, the whole reserve is an accumulated profit of the old firm. It was earned before the new partner joined, so it is credited to the old partners’ capital accounts in the old ratio:

Workmen Compensation Reserve A/c Dr.
To Old Partners’ Capital A/cs

Why the other options are incorrect

Option (1) Debited to old Partner’s Capital A/c — Incorrect. A reserve is a gain to the partners, so their capital accounts are credited; a debit would be right only for an accumulated loss.
Option (2) Credited to all Partner’s Capital A/c — Incorrect. The new partner has no share in profits earned before his admission.
Option (4) Debited to all Partner’s Capital A/c — Incorrect. It is wrong on both counts: the reserve is credited, and only to the old partners.

NCERT (2026-27 edition):
Adjustment for Accumulated Profits and Losses – “Sometimes a firm may have accumulated profits not yet transferred to capital accounts of the partners. These are usually in the form of general reserve, reserve and/or Profit and Loss Account. The new partner is not entitled to have any share in such accumulated profits. These are distributed among the partners by transferring it to their capital current accounts in old profit sharing ratio.”