General reserve is transferred to old partners capital account credit side in old ratio , option D is correct

The correct answer is option D) Old Partners Capital Account.

Explanation:
When a new partner is admitted into a partnership, the existing partners need to make adjustments in their capital accounts to accommodate the new partner. One of the adjustments that need to be made is the transfer of the General Reserve at the time of admission of a partner.

Here is a detailed explanation of why the General Reserve is transferred to the Old Partners Capital Account:

1. General Reserve: General Reserve is a part of the accumulated profits of a partnership that is usually set aside for future contingencies or business expansion. It is created by transferring a portion of the profits from the Profit and Loss Account to the General Reserve Account.

2. Admission of a new partner: When a new partner is admitted into a partnership, the existing partners need to make adjustments in their capital accounts to reflect the changes in the partnership structure. This includes the transfer of the General Reserve.

3. Old Partners Capital Account: The Old Partners Capital Account represents the capital contributions and accumulated profits/losses of the existing partners. It is adjusted to accommodate the new partner's capital contribution and share of profits/losses.

4. Transfer of General Reserve: The General Reserve, being a part of the accumulated profits, is considered as a component of the Old Partners' capital. Therefore, when a new partner is admitted, the General Reserve is transferred to the Old Partners Capital Account to maintain the existing partners' share in the partnership's reserves.

5. Treatment of General Reserve: After the transfer, the General Reserve becomes a part of the Old Partners' capital and can be used for future business purposes or distributed among the partners as per the partnership agreement.

In conclusion, the General Reserve at the time of admission of a partner is transferred to the Old Partners Capital Account to maintain the existing partners' share in the partnership's reserves. This adjustment ensures that the new partner's admission does not affect the distribution of accumulated profits among the existing partners.