At the time of admission of a new partner, general reserve appearing in the old balance sheet is transferred to..................
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Old Partner's Capital A/c
A general reserve in the old balance sheet was built from profits earned before the new partner joined. It belongs to the old partners and is transferred to their capital accounts in the old ratio: General Reserve A/c Dr. To Old Partners’ Capital A/cs. This is the book’s own Test your Understanding item; its answer key gives (c).
Why the other options are incorrect
Option (1) All Partner's Capital A/c — Incorrect. The new partner had no share in the past profits that made up the reserve.
Option (2) New Partner's Capital A/c — Incorrect. The reserve is not the new partner’s at all.
Option (4) Gaining Partner's Capital A/c — Incorrect. On admission the old partners sacrifice; there is no gaining partner among them.
NCERT (2026-27 edition):
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