Which of the following will continue to appear in the balance sheet after the admission of a partner 1.general reserve 2.investment fluctuations reserve 3.profit and loss debit balance 4.all of the above
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Which of the following will continue to appear in the balance sheet after the admission of a partner 1.general reserve 2.investment fluctuations reserve 3.profit and loss debit balance 4.all of the above
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Answer:
The old partner's capital accounts
Explanation:
At the time of admission of a partner, the firm is reconstituted and all accumulated reserves are distributed. Investment fluctuation reserve is made to prevent any loss from a sudden fall in the value of investments. If at the time of revaluation of investments there is a fall in price of the investments, this loss is deducted from the investment fluctuation reserve and is distributed among the old partners in their profit sharing ratio.
The accounting entry is:
Investment Fluctuation Reserve a/c....
To Partner's capital a/c