On the admission of a new partner increase in the value of assets is…

The correct answer is Option (2) → Assets Account

An increase in the value of an asset is a gain on revaluation. The entry is Asset A/c Dr. To Revaluation A/c: the asset account is debited to raise its balance, and the Revaluation Account is credited with the gain.

Option (1) Profit and Loss Adjustment Account — Incorrect. This account (another name for Revaluation Account) is credited, not debited, with a gain.

Option (3) Old Partner’s Capital Account — Incorrect. The old partners’ capital accounts are credited later with the net gain on revaluation.

Option (4) Revaluation Account — Incorrect. Revaluation Account is credited with an increase in the value of assets; it is debited with a decrease.