Practicing Success
Read the following two statements Assertion (A) and Reason (R). Choose one of the correct alternatives given below. Assertion (A): Undistributed profits or losses appearing in the balance sheet at the time of admission should be transferred to all partner’s capital/current account. |
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A). Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A). Assertion (A) is true but Reason (R) is False Assertion (A) is False but Reason (R) is true. |
Assertion (A) is False but Reason (R) is true. |
The correct answer is option 4- Assertion (A) is False but Reason (R) is true. Assertion (A): Undistributed profits or losses appearing in the balance sheet at the time of admission should be transferred to all partner’s capital/current account. This is False. At the time of admission of new partner undistributed profit or losses are distributed among the old partners' capital account (not All) in the existing profit-sharing ratio.
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