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What accounting steps are taken by a partnership firm when a new partner is unable to bring the business guaranteed by him? - Accounts

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Question

What accounting steps are taken by a partnership firm when a new partner is unable to bring the business guaranteed by him?

Very Short Answer
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Solution

When a new partner is unable to bring in the business guaranteed by him, his Capital Account is debited and the Profit and Loss Appropriation Account is credited by the amount of deficiency.

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Chapter 1: Accounting for Partnership Firms - Fundamentals - SHORT ANSWER QUESTIONS [Page 1.133]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 1 Accounting for Partnership Firms - Fundamentals
SHORT ANSWER QUESTIONS | Q 57. | Page 1.133
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