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On dissolution, how is the debit balance of profit and loss account recorded in partners' capital accounts?

Answer and explanation

Correct answer: Debited in profit sharing ratio

Debit balance of profit and loss account is accumulated loss. Debit it to capital accounts in the profit sharing ratio.

Related tags

Profit And Loss DebitAccumulated LossPartner AccountsDissolution Of A Partnership FirmAccountancyClass 12 Mcq

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