Arrange the following in appropriate sequence regarding the admission…

Arrange the following in appropriate sequence regarding the admission of a Partner:

A. Preparation of Revaluation account
B. Partner's Capital Account are completed
C. Preparation of Balance Sheet of New Partnership
D. New Partner brings his share of Capital and goodwill.
E. Transferring the profit/loss on Revaluation to old partners.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → A, E, D, B, C

On admission the assets and liabilities are first revalued, the result goes to the old partners, the new partner then brings his capital and goodwill, and only after the capital accounts are complete can the new Balance Sheet be drawn up.

A. Preparation of Revaluation account – gains and losses on revaluation are recorded.
E. Transferring the profit/loss on Revaluation to old partners – in the old profit sharing ratio, as the change in values belongs to them.
D. New Partner brings his share of Capital and goodwill – credited to his capital account and, for goodwill, shared by the sacrificing partners.
B. Partner’s Capital Account are completed – with all these adjustments the capital accounts are balanced.
C. Preparation of Balance Sheet of New Partnership – the closing balances go into the Balance Sheet of the reconstituted firm.

NCERT (2026-27 edition):
Summary – “… 4. Adjustments for Revaluation of Assets and Reassessment of Liabilities: If, at the time of admission of a partner, the assets and liabilities are revalued or some asset or liability is found unrecorded, necessary adjustments are made through the Revaluatiion Account. Any gain or loss arising from such exercise shall be distributed among the old partner’s in their old profit sharing ratio.”

NCERT (2026-27 edition):
Summary – “… 6. Determining/Adjusting partners’ capital: If agreed, the partner’s capital may be adjusted so as to be proportionate to their new profit sharing ratio. In that case, the new partner’s capital is normally used as a base for determining the new capitals of the old partners and necessary adjustment made through case or by transfer to partner’s current accounts.”

Arrange the following in appropriate sequence regarding the admission of a Partner:

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → A, E, D, B, C

A. Preparation of Revaluation account – gains and losses on revaluation are recorded.
E. Transferring the profit/loss on Revaluation to old partners – in the old profit sharing ratio, as the change in values belongs to them.
D. New Partner brings his share of Capital and goodwill – credited to his capital account and, for goodwill, shared by the sacrificing partners.
B. Partner’s Capital Account are completed – with all these adjustments the capital accounts are balanced.
C. Preparation of Balance Sheet of New Partnership – the closing balances go into the Balance Sheet of the reconstituted firm.