Question

why are accumulated reserves, profit and losses not transferred to incoming partner capital a/c? ​

Answer 1

Answer:Sometimes the balance sheet of the firm shows accumulated profits like general reserve, profit & loss a/c etc. Even the retiring partner should get a share of the undistributed profits because the accumulated profit was created while he was a partner and is also liable to share the accumulated losses (if any). These accumulated profits and losses should be transferred to all partners' capital accounts in their profit sharing ratio.

Explanation:Follow me