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.
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 1
Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.
Undistributed Profits and losses in the balance sheet belongs to the old partners.
Undistributed Profits and losses in the balance sheet belongs to the old partners.