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ASSERTION (A): At the time of admission of partners if there is any general reserve, reserve fund or the balance of profit & loss account appearing in the balance sheet, it should be transferred to old partners’ capital/current accounts in their old profit sharing ratio. REASON (R): The general reserve, reserve fund or the balance of profit & loss account are the result of the past profits when the new partner was not admitted. (a) Both Assetion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A) (b) Both Assertion (A) and the reason (R) are true, but the reason (R ) is not the correct explanation of Assertion (A) (c) Assertion (A) is true, but Reason ( R) is false (d) Assertion (A) is false, but Reason (R) is True |
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Answer» (a) Both Assetion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A) |
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