When a new partner is admitted, the increase in the value of the assets is debited to which account?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Assets account
On admission the assets are revalued. An increase in the value of an asset is recorded in the asset’s own account: the asset account is debited (its value goes up) and the Revaluation (Profit and Loss Adjustment) Account is credited with the gain.
Option (2) Profit and Loss Adjustment account — Incorrect. This account is credited with the gain, not debited.
Option (3) Old partner's capital account — Incorrect. The old partners receive only the net gain on revaluation, when the revaluation account is closed; they are not debited with the increase.
Option (4) Profit and Loss account — Incorrect. A revaluation gain is a capital adjustment; it does not pass through the Profit and Loss Account of the year.
NCERT (2026-27 edition):
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