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Question
Who is entitled to have share in accumulated profits?
Who is entitled to have share in accumulated profits?
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Solution
The correct option is C Old partner
When a new partner is being admited into the firm, then before his admission all the existing reserves or accumulated profits in the books of the firm should be transferred to Old Partners in capital/current accounts in the old profit sharing ratio, because these items belong to the old partners and not to the new partner.
When a new partner is being admited into the firm, then before his admission all the existing reserves or accumulated profits in the books of the firm should be transferred to Old Partners in capital/current accounts in the old profit sharing ratio, because these items belong to the old partners and not to the new partner.
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