Match the following-
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1) b 2) a 3) c 4) d 1) b 2) c 3) d 4) a 1) a 2) b 3) d 4) c 1) b 2) a 3) d 4) c |
1) b 2) a 3) d 4) c |
* Employees' provident fund- Employees Provident Fund is a retirement benefits fund created by the business for the welfare of its employees. Therefore, at the time of Reconstitution of Partnership Firm i.e. Admission/Retirement/Death of a Partner, it should not be distributed among the partners, in fact, it is shown as liability on the Reconstituted Firm's Balance Sheet. * Advertisement expenditure- Sometimes, the Balance Sheet of a firm may show accumulated losses in the form of profit and loss account debit balance. The retiring/deceased partner is entitled to his/her share in the accumulated losses, if any. These accumulated losses belong to all the partners and should be transferred to the capital accounts of all partners in their old profit sharing ratio. Advertisement expenditure is a accumulated loss. The journal entry for transfer of accumulated losses * Machinery replacement fund- Machinery replacement fund investment appearing on asset side and machinery replacement fund appearing on liabilities side at the time of retirement. No amount is given to the retiring partner because this fund is received for machinery replacement. It is not a free fund that we have to be distribute. This fund can be created by accumulating depreciation for many years. * P & L credit balance- Sometimes, the Balance Sheet of a firm may show accumulated profits in the form of general reserve, profit and loss credit balance. The retiring/deceased partner is entitled to his/her share in the accumulated profits if any. These accumulated profits belong to all the partners and should be transferred to the capital accounts of all partners in their old profit sharing ratio. The following journal entries are recorded for the transfer of accumulated profits (reserves), |