CA Foundation Exam > CA Foundation Questions > General Reserve at the time of admission of a...
Start Learning for Free
General Reserve at the time of admission of a partner is transferred to ____________ .
- a)Revaluation Account
- b)Capital Accounts of all partners, including new partner
- c)None of the these
- d)Old Partner's Capital Account
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
General Reserve at the time of admission of a partner is transferred t...
Sometimes a firm may have accumulated reserves not yet transferred to the partner's capitals accounts. These are in the form of general reserve, reserve fund etc. The new partner is not entitled to share in these reserves. Hence, at the time of admission, these reserves are transferred to the old partner's capital accounts in their profit sharing ratio.
Most Upvoted Answer
General Reserve at the time of admission of a partner is transferred t...
General reserve is transferred to old partners capital account credit side in old ratio , option D is correct
Free Test
FREE
| Start Free Test |
Community Answer
General Reserve at the time of admission of a partner is transferred t...
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.
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.
|
Explore Courses for CA Foundation exam
|
|
Top Courses for CA FoundationView all
Question Description
General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer?.
General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer?.
Solutions for General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice General Reserve at the time of admission of a partner is transferred to ____________ .a)Revaluation Accountb)Capital Accounts of all partners, including new partnerc)None of the thesed)Old Partners Capital AccountCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up
within 7 days!
within 7 days!
Takes less than 10 seconds to signup