Question

General Reserve at the time of admission of a partner is transferred to ____________ .

• A. Revaluation Account
• B. Old Partner's Capital Account
• C. Capital Accounts of all partners, including new partner
• D. None of the above

Answer 1

The correct option is B Old Partner's Capital Account

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.