If there are any accumulated profits or losses appearing in the books of the old firm at the time of admission of a new partner, then these are distributed among the old partners in their old profit sharing ratio. Such accumulated profits or losses are generally in the form of reserves such as Reserve Fund, General Reserve, Profit and Loss Account, Investment Fluctuation Reserves, Workmen’s Compensation Reserves, etc. The new partner is not entitled to any share of such accumulated profits as all these reserves and losses are accrued to the hard work and past efforts of the old partners.
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Profit and Loss Account
A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.
Accounting Software
Accounting software is an integral part of the computerized accounting system. The accounting software should be selected after considering the level of skill and proficiency of the accounting professionals.
What are Accounting Reports?
Accounting Reports: When the collected data is processed and manipulated in a useful sense that can be understood by the users without any ambiguity, then it becomes information.
Transaction Processing System
Transaction Processing System (TPS) refers to a computerized system that records, processes, validates, and stores routine transactions that occur in various functional areas of a business on daily basis.