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Question
General Reserve appearing in the Balance Sheet is transferred to ______
Options
Realization Account
Partners' Capital Accounts in their profit sharing ratio
Partners' Capital Accounts in capital ratio
None of the above
MCQ
Fill in the Blanks
Solution
General Reserve appearing in the Balance Sheet is transferred to Partners' Capital Accounts in their profit sharing ratio.
Explanation:
The General Reserve is an appropriation of profits set aside for the future that was originally owned by the partner.
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Change in Profit Sharing Ratio Among the Existing Partners
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