An increase in liability at the time of death of a partner in a partnership firm is:
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Debited to revaluation A/c.
An increase in liability at the time of death of a partner in a partnership firm is debited to the revaluation A/c.
The following journal entries are passed in case of decrease and increase in amount of liabilities:
* For increase in the amount of liabilities
Revaluation A/c Dr.
To Liabilities A/c (Individually)
(Increase in the amount of liabilities)
* For decrease in the amount of liabilities
Liabilities A/c’s (Individually) Dr.
To Revaluation A/c
(Decrease in the amount of liabilities)