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Question

On the admission of a new partner, the balance of the profit and loss adjustment account should be transferred to the capital account of_________.

A
all partners in their new profit-sharing ratio
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B
old partners in their old profit-sharing ratio
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C
old partners in their new profit-sharing ratio
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D
old partners in their sacrificing ratio
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Solution

The correct option is B old partners in their old profit-sharing ratio
b'One of the forms of reconstitution of the firm is Change in Profit Sharing Ratio among Existing Partners. Here there is no change in the partners carrying on the business of the firm. The only change is the profit sharing ratio among existing partners.'

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