Question : At the time of admission of a partner, what will be the effect of the following information? Balance in Workmen compensation reserve Rs. 28,000. Claim for workmen compensation Rs. 20,000.
Option 1: Rs. 28,000 Debited to the Partner's capital Accounts.
Option 2: Rs. 2,000 Debited to Revaluation Account.
Option 3: Rs. 8,000 Credited to the Partner's capital Accounts.
Option 4: Rs. 20,000 to Debited Revaluation Account
Correct Answer: Rs. 8,000 Credited to the Partner's capital Accounts.
Solution : Answer = Rs. 8,000 Credited to the Partner's capital Accounts.
Workmen Compensation Reserve A/c Dr 28,000
To Claim for Compensation A/c 20,000
To Partner's Capital A/c 8,000
Hence, the correct option is 3.
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