When a new partner is admitted, the increase in the value of the assets is debited to which account?

Assets account

The correct answer is Option (1) → Assets account.

On the admission of a new partner, an increase in the value of assets is debited to Assets account.

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.