Question 19 of 53beginner🧠 RememberFill in the Blanks1 mark

Accumulated losses are transferred to _____ (Realisation/Capital Accounts) in _____ (equal ratio/profit sharing ratio).

Correct Answer

Capital Accounts; profit sharing ratio

Exercise: Test your Understanding – III | Q: 3 | (Page 17)
For More Understanding

Explanation

According to the context, accumulated losses (which are fictitious assets) are not transferred to the Realisation Account. The context states that 'all assets (other than cash in hand bank balance and fictitious assets, if any)' are transferred to Realisation Account. Therefore, accumulated losses are directly transferred to the Partners' Capital Accounts. The context also clearly states that profit or loss is 'transferred to partner's capital accounts in their profit sharing ratio.'