Page 6 - L N (change in psr)

Workmen Compensation Reserve A/c …Dr.

To Provision for Workmen Compensation Claim A/c

To Partners’ Capital or Current A/c

(Being the surplus of Workmen Compensation Reserve transferred to

Partners’ Capital or Current Account in their old profit sharing ratio)

III Claim amount is higher than the reserve: Amount in excess of reserve is
debited to Revaluation Account as the loss is to be borne by the partners in

old profit sharing ratio. Entry is:

Workmen Compensation Reserve A/c …Dr.

Revaluation A/c …Dr.

To Provision for Workmen Compensation Claim A/c

(Being amount of estimated claim debited to Workmen Compensation
Reserve and Revaluation Account)

Partners’ Capital or Current A/cs …Dr. (In Old Ratio)

To Revaluation A/c

(Being the loss on revaluation transferred to Capital or Current Account of

partners in their old profit sharing ratio)

Investments Fluctuation Reserve:

i. It is a reserve which is set aside out of the profits to meet fall in the market
value of investments.