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Home Questions GRRP6XDQD8
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

What will be the journal entry for the increase in liabilities at the time of reassement at the time of retirement of partner from the firm?

Options:

Revaluation A/c   Dr.
    To Liabilities A/c

Liabilities A/c    Dr.
      To Revaluation A/c

Liabilities A/c    Dr.
       To Realisation A/c

Realisation A/c    Dr.
     To Liabilities A/c

Correct Answer:

Revaluation A/c   Dr.
    To Liabilities A/c

Explanation:

The correct answer is option 1-
Revaluation A/c   Dr.
    To Liabilities A/c

Revaluation Account is debited because an increase in liability is a loss to the firm. The specific Liability Account is credited to reflect the increase in liability in the books.

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