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 account
General reserve is a profit of the old firm kept aside before the new partner came in. He has no share in profits earned before his admission, so the reserve is transferred to the old partners’ capital accounts in their old profit sharing ratio.
NCERT (2026-27 edition):
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