Practicing Success
Practicing Success
CUET Preparation Today
| What treatment is made of accumulated profits and losses on the retirement of a partner? |
Credited to all partner’s capital accounts in old ratio. Debited to all partner’s capital accounts in old ratio. Credited to remaining partner’s capital accounts in new ratio. Credited to remaining partner’s capital accounts in gaining ratio. |
| Credited to all partner’s capital accounts in old ratio. |
| 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. Reserves A/c Dr. Profit & Loss A/c Dr. In case of accumulated loss, the accounting treatment is to debit the capital account of old partner's. |
