Why is it wrong to distribute accumulated profit in the new profit sharing ratio?

Correct answer: Because accumulated profit is pre-admission and should be shared in old ratio

Accumulated profit is connected with the period before a new partner enters the firm. During that period, only the old partners supplied capital, accepted risks, and shared profits. The incoming partner was not entitled to profits earned before admission. Therefore, such profit must be distributed among the old partners according to their old profit-sharing ratio.

Option A gives this exact reason and is correct. The new ratio is not used for every accounting item; it applies to profits and losses arising after reconstitution. The statement that accumulated profit is always a loss is also wrong, because accumulated profit is a credit or benefit for the partners. Similarly, the new partner does not automatically receive the whole amount. The timing of the profit determines the appropriate ratio.