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In the event of death of a partner, the amount of General Reserve is transferred to Partners' Capital Accounts in their ______. -

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Question

In the event of death of a partner, the amount of General Reserve is transferred to Partners' Capital Accounts in their ______.

Options

  • New Profit Sharing Ratio 

  • Old Profit Sharing Ratio

  • Capital Ratio 

  • None of the above

MCQ
Fill in the Blanks

Solution

In the event of death of a partner, the amount of General Reserve is transferred to Partners' Capital Accounts in their Old Profit Sharing Ratio.

Explanation:

It is done to ensure that the retried partner receives the requisite percentage of the firm's profits.

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