Question : In case of dissolution of a partnership firm, what will be the treatment of investment fluctuation Reserve if the value of investment is not given in the assets side of the balance sheet?
Option 1: Transferred to debit side of realization account.
Option 2: Transferred to credit side of realization account
Option 3: Distributed among the partners.
Option 4: none of the above
Correct Answer: Distributed among the partners.
Solution :
Answer =
Distributed among the partners
If Investment Fluctuation Reserves are given on the liabilities side of the Balance Sheet but the value of the investment is not given in the question, it should be distributed among the old Partners.
Hence, the correct option is 3.
