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CBSE Class 12-commerce Answered

i want to clearly know the reserves anmd accumulated profit concept  
Asked by akshitaaruna | 10 Oct, 2019, 01:31: PM
answered-by-expert Expert Answer
Treatment of reserves, accumulated profits or losses that exist in the books of account at the time of Reconstitution of the firm:
 
If any reserves and accumulated profits or losses exist in the books of firm at the time of reconstitution of the firm, they are to be transferred to the Partners’ Capital Accounts or their Current Accounts in their old profit sharing ratio as such existing reserves and profits are earned before the reconstitution of the firm.
 
In case if there are any specific reserves like Workmen Compensation Reserves, Investment Fluctuation Reserve, etc. then claim against such reserves is to be first adjusted and only the balance of Reserves after reducing such claims should be transferred to the Partners' Capital or Current Account in their old profit sharing ratio.
Answered by Surabhi Gawade | 10 Oct, 2019, 05:29: PM

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