In case of admission of a partner, any accumulated losses appearing in the form of a debit balance of profit and loss account and/or deferred revenue expenditure appearing in the balance sheet of the firm, should be transferred to _____.

Debit Side of Old Partners' Capital Account

Correct answer: Option (1) → Debit Side of Old Partners' Capital Account

Concept: Accumulated losses and deferred revenue expenditure existing at the time of admission belong to the old partners and must be written off before the new partner enters – see Reconstitution of a Partnership Firm – Admission of a Partner.

Such items (debit balance of Profit & Loss A/c, deferred revenue expenditure) are losses, so they are debited to the OLD partners’ capital accounts in their OLD profit-sharing ratio. The new partner does not share past losses, so the “all partners” options are wrong; and being losses they are debited (not credited), ruling out the credit-side options.