Question

write specimen general entry for the distribution of Reserve fund and accumulated profit of a partnership firm​

Answer 1

Answer:

Hey!!!

Explanation:

Accumulated Profits and Losses is the sum of an enterprise’s profits and losses left, after the dividend is paid. It can also be termed as either retained capital, retained earnings or earned surplus.

Sometimes, an enterprise might have accrued profits but not yet transferred to capital accounts of the partners. These are usually in the form of general reserve, reserve fund and/or Profit and Loss account balance. However, the new partner is not entitled to have any share in such accumulated profits. These are only allocated among the old partners by transferring it to their capital A/c in old profit sharing ratio. Correspondingly, if there are some accrued losses in the form of a Dr (Debit) balance of Profit and Loss account appearing in the balance sheet of the firm.