Practicing Success
If there is nothing mentioned, accumulated reserves are .................... |
Distributed among old partners in old profit sharing ratio Not distributed among partners Distributed between partners in equal ratio Distributed among all partners in new profit sharing ratio |
Distributed among old partners in old profit sharing ratio |
Accumulated earnings are the sum of a company’s profits, retained earnings, earned surplus, or retained capital, after dividend payments, since the company’s inception. Accumulated losses refer to the advertisement expenditure and also previous year losses (if any) which have not been distributed among partners. These accrued gains or losses perfectly fits the partners and should be transferred to the capital a/c of the partners in their old profit sharing ratio, if there is nothing mentioned in the question. |