Assertion: Undistributed profits or losses appearing in the balance sheet at the time of admission should be transferred to the old partner’s capital/current account in the sacrificing ratio.
Reasoning: Undistributed profits or losses appearing in the balance sheet at the time of admission belong to the old partners as they are earned by them.
Reasoning: Undistributed profits or losses appearing in the balance sheet at the time of admission belong to the old partners as they are earned by them.
Answer & explanation
Correct answer: option 4
Assertion(A) is not true as at the time of admission of new partner undistributed profit or losses are distributed to all partners in new ratio .Reason (R) is correct as undistributed profits or losses appearing in the balance sheet at the time of admission should be transferred in the old ratio.