do we distribute employee provident fund to partners at the time of :
1. admission/ retirement
2. dissolution( is it treated the same way as reserve fund ?)
Dear Student, Employees Provident Fund is a retirement benefit fund created by the business for the welfare of its employees. Therefore, at the time of Reconstitution of Partnership Firm i.e. Admission/Retirement/Death of a Partner, it should not be distributed among the partners, in fact, it is shown on the Reconstituted Firm's Balance Sheet.
In response to your second query, at the time of Dissolution of Partnership Firm, it is transferred to the credit side of Realisation Account like any other liability of the firm, and finally are paid off by debiting it to Realisation Account.
In response to your second query, at the time of Dissolution of Partnership Firm, it is transferred to the credit side of Realisation Account like any other liability of the firm, and finally are paid off by debiting it to Realisation Account.