What accounting records will be make in respect to assets and liabilities , reserve and undistributed profit in case of change in profit sharing ratio of partner?
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The accounting record that will be made is a Balance Sheet.
A balance sheet is a statement of the assets , liabilities and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over a given period of time.
Accumulated profits appear in the liabilities side of the balance sheet.
The undistributed profits belong to old parties and the undistributed profits are transferred to the old partners account in their old profit sharing ratio before a new partner is admitted
A balance sheet gives an idea of the company's financial position in addition to displaying what the company owes
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