Partnership

Principles of Accounting & Financial Management

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On the retirement of a partner any reserve being should be transferred to capital account of:

All partners in old profit sharing ratio

Remaining partners in new profit sharing ratio

Neither the remaining partner, nor the retiring partner

None of the above

Explanation:

At the time of retirement of a partner, if there exist any reserve or accumulated profit in the books of the firm, they should be transferred to the old partner's capital/current accounts in the old profit sharing ratio, because these items belongs to the old partners

By: SWAPNIL AGGARWAL

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