Question :
Assertion (A) : Rajiv and Vinod, who share the profit and losses in 2 : 3, are dissolving the firm. There is a general reserve in the balance sheet of Rs.60000. The accountant transferred Rs.24000 in Rajiv's capital account and Rs.36000 in Vinod's capital account.
Reason (R) : The undistributed profit and losses and reserves are always transferred to partners' capital account in their profit sharing ratio and not to the realisation account.
Option 1: Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct eplanation of Assertion (A).
Option 2: Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct eplanation of Assertion (A).
Option 3: Assertion (A) is true, but Reason (R) is false
Option 4: Assertion (A) is false, but Reason (R) is true.
Correct Answer: Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct eplanation of Assertion (A).
Solution : Since capital is an investment made by the partners themselves, the firm will only return the capital to the partners at the time of a partner's dissolution once all other debts, including any loans made in proportion to the partners' capital, have been settled.
Hence the Correct answer is option 1.
Related Questions
Trending Articles/News
