In case of admission of partner in a firm, the old partners (existing) are entitled to?
(A) Share of profit or loss of revaluation account.
(B) Share of goodwill brought in by new partner.
(C) Share of existing accumulated profits but not of accumulated losses.
(D) Share in employees provident fund.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A) and (B) only
On admission, everything that belongs to the period before the new partner joined is settled among the old partners in their old ratio, gains and losses alike. Each statement is checked against that.
(A) Share of profit or loss of revaluation account. Correct. Assets and liabilities are revalued to their value on the date of admission, and the gain or loss goes to the old partners in their old ratio.
(B) Share of goodwill brought in by new partner. Correct. The premium for goodwill is the new partner's payment for the reputation the old partners built, so it is shared by the old partners in their sacrificing ratio.
(C) Share of existing accumulated profits but not of accumulated losses. Incorrect. The old partners take both: reserves and accumulated profits are credited to them, and accumulated losses are debited to them, in the old ratio. They cannot keep the profits and leave the losses for the new partner.
(D) Share in employees provident fund. Incorrect. Employees' provident fund is money the firm owes to its employees, a liability, not a reserve. It is not divided among the partners.
NCERT (2026-27 edition):
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