Rajinder and Surinder are partners in a firm sharing profits in the ratio of 4:1. On April 15, 2017, they admitted Narender as a new partner. On that date, there was a balance of Rs. 20,000 in general reserve and a debit balance of Rs. 10,000 in the profit and loss account of the firm. Which among the following statements is correct for transferring profit and loss account?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 2,000 will be debited to Surinder's Capital A/c
A debit balance in the Profit and Loss Account is an accumulated loss of the old partners. On the admission of a new partner it is written off to the old partners’ capital accounts in their old ratio, so the new partner bears none of it.
Rajinder’s share of the loss = Rs. 10,000 × 4/5 = Rs. 8,000 (debited)
Surinder’s share of the loss = Rs. 10,000 × 1/5 = Rs. 2,000 (debited)
A loss is debited, so Rs. 8,000 is debited (not credited) to Rajinder. The credits of Rs. 16,000 and Rs. 4,000 belong to the general reserve of Rs. 20,000, which is a separate entry.
NCERT (2026-27 edition):
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