question_answer

Assertion (A) :

At the time of admission of a new partner, if partners have decided not to distribute the General Reserve (given in balance sheet), instead of crediting the amount of General Reserve to the partners directly, an adjustment entry is to be recorded.

Reason (R) :

Adjustment entry is recorded to determine the amount of compensation to be paid to the sacrificing 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