Question : At the time of admission of a partner, Employees Provident Fund is:
Option 1: Distributed to partners in the old profit sharing ratio
Option 2: Distributed to partners in the new profit sharing ratio
Option 3: Adjusted through gaining ratio
Option 4: Should be shown on the liabilities side of new firm Balance Sheet
Correct Answer: Should be shown on the liabilities side of new firm Balance Sheet
Solution : Answer = Should be shown on the liabilities side of the new firm Balance Sheet
At the time of admission of a partner, the Employees Provident Fund (EPF) is a liability of the firm and should be shown on the liabilities side of the new firm's balance sheet. It is not distributed to partners but is retained as a liability of the firm to fulfill its obligations towards employees.
Hence, the correct option is 4.
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