Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Profit and loss account at admission of partner

238 views

Save Share

Join Us Follow Us Add as Source

Atharv Sankliya

1359 Points Posted on 14 November 2022

does profit and loss account is prepared at admission of partner ??

Replies (2)

Quick Summary

Yes, a profit and loss account is indeed prepared when a new partner is admitted. Any existing balance in the profit and loss account at the time of admission is transferred to the capital accounts of the old partners. This transfer is done according to their original profit-sharing ratio.

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

212441 Points Posted on 15 November 2022

Yes, At the time of admission of a partner, any balance remaining in the profit and loss account is transferred to the old partners' capital accounts in the old profit sharing ratio.