Question

Balance in the Investment Fluctuation Reserve, after meeting the loss on revaluation of Investments, at the time of admission of a partner will be transferred to:

Options

• Old Partner's Capital Accounts

• Revaluation Account

• Sacrificing Ratio

• None of the above

Answer 1

Old Partner's Capital Accounts

Explanation:

In the old profit sharing ratio and not in the sacrifice ratio, any accumulated reserves and surplus are transferred to the old partner's capital account rather than the revaluation account.