Read the following passage and answer the following question.

A, B & C are partners sharing profits in proportion to their capital. A retired from the firm on 1st April 2021 and the remaining partners decided to carry on the partnership with a profit-sharing ratio of 4:3. At the time of retirement, their capital accounts show balance- A- ₹2,00,000, B- ₹3,00,000, and C ₹2,00,000. The assets and liabilities of the partnership firm are as follows-
Creditors- ₹50,000
General reserve- ₹35,000
Workmen Compensation fund ₹15,000
Cash balance- ₹1,00,000
Stock- ₹1,00,000
Machinery- ₹3,00,000
Land- ₹2,00,000
Debtors after provision for doubtful debts (10,000)= ₹1,00,000

The claim on account of workmen compensation was estimated at ₹8,000. How workmen compensation fund treated?

A difference of ₹7,000 credited to partners' capital account

The correct answer is option 1- A difference of ₹7,000 credited to partners' capital account.

Fund = ₹15,000
Estimated Claim = ₹8,000

Difference = 15,000 - 8,000
                 = ₹7,000

This ₹7,000 is the profit which is distributed between partners. So, it is credited to partners capital account.