On the retirement of ‘Hari from the firm, of ‘Hari Ram and Sharma’ the balance sheet showed a debit balance of Rs. 12,000 in the profit and loss account. How will you deal with this balance? (C.B.S.E.2015 )


It will be transferred to the debit of capital accounts of Hari, Ram and Sharma in their profit-sharing ratio i.e., equally.

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