X, Y and Z are partners, X retires . Workmen Compensation Reserve appears in the balance sheet at Rs. 10,000 and there is no claim for workers' compensation. Workmen Compensation Reserve will be:
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Carried forward in new balance sheet
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Carried Forward
Explanation:
When there appears a Workmen Compensation Reserve maintained by the company in the Balance sheet to be Rs.10,000 and there is no claim of any worker in the respective year. Therefore Workman Compensation Reserve will be carried to The balance Sheet of the next year.
Workmen Compensation Reserve is maintained for the uncertainty regarding the workmen force. To suffice any uncertainty coming in the future for providing compensation to any workmen for the damage caused to him/her.
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