| Assertion (A) : |
| When a new partner is admitted, all free reserves and accumulated profits/losses exist in the balance sheet, should be transferred to the old partners capital/current accounts in their old profit sharing ratio. |
| Reason (R) : |
| Employees Provident Fund is a liability of the firm; hence it should not be distributed among the partners. |
| Choose the Correct Option from the following: |
A) Assertion and Reason both are correct and Reason is the correct explanation of assertion
B) Assertion and Reason both are correct but Reason is not correct explanation of assertion
C) Both Assertion and Reason are not correct
D) Only Assertion is correct
Correct Answer: B
Solution :
Assertion and Reason both are correct but Reason is not correct explanation of assertion
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