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:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A), (C), and (D) only
The Revaluation Account records only changes in the values of assets and liabilities (including assets or liabilities not yet recorded) when the firm is reconstituted.
(A) Increase in assets Correct. An increase in the value of an asset is a gain, credited to the Revaluation Account.
(B) Drawings against capital Incorrect. Drawings are a dealing between a partner and the firm, recorded in the partner’s capital account; they do not change the value of any asset or liability being revalued.
(C) Recording of unrecorded assets Correct. An asset brought into the books for the first time is a gain, credited to the Revaluation Account.
(D) Decrease in liabilities Correct. A fall in a liability is a gain, credited to the Revaluation Account.
NCERT (2026-27 edition):
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