Question

Assertion (A): At the time of death of a partner, the deceased partner will not get share in General Reserve and credit balance in Profit & Loss Account, if the Partnership Deed does not provide so.

Reason (R): Deceased partner will get his share of Workmen Compensation Reserve remaining after claim, if any.

In the context of the above two statements, which of the above options is correct?

पर्याय

• Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) is correct, but Reason (R) is not correct.

• Assertion (A) is not correct, but Reason (R) is correct.

Answer 1

Assertion (A) is not correct, but Reason (R) is correct.

Explanation:

On death, a partner is entitled to his share of accumulated profits and reserves (including general reserve and credit balance of P&L) as part of the amount due to the deceased; these adjustments are made even if the deed is silent. The Reason is correct because specific reserves (for example, Workmen’s Compensation Reserve) form part of accumulated reserves and the deceased’s executors are entitled to the deceased partner’s share of any balance remaining after claims.