Assertion (A): At the time of retirement of a partner, the remaining partners may decide to adjust their capital in their new profit sharing ratio.
Assertion (A): At the time of retirement of a partner, the remaining partners may decide to adjust their capital in their new profit sharing ratio.
Reason (R): In such a situation, the sum of balances in the Capital Accounts of continuing partners may be treated as the total capital of the new firm, unless specified otherwise.
In the context of above two statements, which of the following is correct?
a) Assertion (A) is correct but Reason (R) is wrong
b) Both Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of Assertion (A)
c) Both Assertion (A) and Reason (R) are incorrect.
d) Both Assertion (A) and Reason (R) are correct, and Reason (R) is the correct explanation of Assertion (A).
Anurag Pathak Changed status to publish July 3, 2023
Ans – d)
Explanation:- the remaining partners may adjust their capitals in the new profit-sharing ratio and sum total of partners’ adjusted capital is treated as the total capital of the new firm.
Anurag Pathak Changed status to publish July 3, 2023
