Question : At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :
Option 1: Creditor’s Account
Option 2: Realisation Account
Option 3: Partner’s Capital Account
Option 4: Profit & Loss Account

Question

Question : At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :

Option 1: Creditor’s Account

Option 2: Realisation Account

Option 3: Partner’s Capital Account

Option 4: Profit & Loss Account

Team Careers360 · Accepted Answer

Correct Answer: Partner’s Capital Account

Solution : The general reserve balance is transferred to each partner's capital account according to their prior profit-sharing arrangement. This is done to ensure that the candidate for the late partner receives the necessary portion of the Firm income. Therefore, the appropriate shares are credited to each partner's capital account.

Hence the Correct answer is option 3.

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Question : At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :Option 1: Creditor’s AccountOption 2: Realisation AccountOption 3: Partner’s Capital AccountOption 4: Profit & Loss Account

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Question : At the time of firm’s dissolution, Balance of General Reserve shown in the Balance Sheet is credited to :
Option 1: Creditor’s Account
Option 2: Realisation Account
Option 3: Partner’s Capital Account
Option 4: Profit & Loss Account