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Question
When a new partner is admitted, the balance of 'General Reserve' appearing in the Balance Sheet is credited to ______.
Options
Profit and Loss Appropriation Account
Capital Accounts of all partners
Revaluation Account
Capital Accounts of old partners
MCQ
Fill in the Blanks
Solution
When a new partner is admitted, the balance of 'General Reserve' appearing in the Balance Sheet is credited to Capital Accounts of old partners.
Explanation:
In the previous profit-sharing ratio, the amount of "General Reserve" in the balance sheet during the company's restructuring is moved to the capital account of the former partner.
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