Which of the following would affect the revaluation account at the time of admission of a partner?

(A) Increase in assets

(B) Drawings against capital

(C) Recording of unrecorded assets

(D) Decrease in liabilities

Choose the correct answer from the options given below:

(A), (C), and (D) only

The correct answer is option 3- (A), (C), and (D) only.

(A) Increase in assets: When a new partner is admitted, the partnership might revalue its assets to reflect their current market value. If there's an increase in the value of assets, it would be recorded on the credit side of revaluation account as it is a gain of the firm. Journal entry passed in this case is- Asset A/c Dr. To Revaluation A/c.

(B) Drawings against capital: Drawings against capital don't affect the revaluation account. Drawings represent withdrawals made by partners for personal use and are recorded in their capital account.

(C) Recording of unrecorded assets: If there are assets that were previously unrecorded then their recording will impact the revaluation account. Unrecorded asset is a gain of the firm. Journal entry passed in this case is- Unrecorded Asset A/c Dr. To Revaluation A/c.

(D) Decrease in liabilities: Similarly to assets, if there's a decrease in the value of liabilities, it would also affect the revaluation account. Decrease in liability is a gain of the firm which is to be recorded on the credit side of the revaluation account. Journal entry passed in this case is- Liability A/c Dr. To Revaluation A/c.