CUET Preparation Today
On the admission of a new partner, an increase in the value of assets is debited to: |
Profit and loss adjustment account Assets account Old Partners Capital Account All partners Capital account |
Assets account |
The correct answer is option 2- Assets account. On the admission of a new partner, an increase in the value of assets is debited to Assets account. For increase in the value of an asset- 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. |
