Practicing Success
Where the balance of investments fluctuation reserve will be transferred after meeting the loss on revaluation of investments at the time of admission of new partner? |
Old partners' capital A/c New partners' capital A/c Revaluation account None of these |
Old partners' capital A/c |
Sometimes, the Balance Sheet of a firm may show accumulated profits in the form of general reserve and/on 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 profits and is also liable to share the accumulated losses if any. These accumulated profits or losses belong to all the partners and should be transferred to the capital accounts of all partners in their old profit-sharing ratio. |