Question

The accumulated profits are transferred to:

• A. Realisation A/c
• B. Partners’ Capital A/c
• C. Bank A/c
• D. Profit & Loss Appropriation A/c

Hint:

Accumulated profits/losses are always distributed to partners in their old ratio before reconstitution.

Answer 1

The Correct Option is B

Step 1: Nature of accumulated profits.
Accumulated profits (Reserves, General Reserve, Undistributed Profits) belong to existing partners.
Step 2: Adjustment during reconstitution.
At admission, retirement, or death of a partner, these profits are transferred to partners’ capital accounts in their old profit-sharing ratio.
Step 3: Conclude.
Thus, accumulated profits are transferred to Partners’ Capital A/c.
Final Answer: \[ \boxed{\text{Partners’ Capital A/c}} \]