Accountancy Part AAdmission of a Partner

Choose the correct sequence of steps related to admission of a new pa…

Choose the correct sequence of steps related to admission of a new partner.

(A) Prepare Revaluation Account.

(B) Prepare Balance Sheet.

(D) Prepare Partners' Capital Account.

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (C), (A), (D), (B)

(C) Calculation of sacrificing ratio. — first, because it decides how the new partner's goodwill is shared among the old partners.

(A) Prepare Revaluation Account. — assets and liabilities are revalued next, and the profit or loss is found.

(D) Prepare Partners' Capital Account. — goodwill, reserves, the revaluation result and the capital brought in are all posted here.

(B) Prepare Balance Sheet. — last, because it needs the closing balances of the capital accounts.

NCERT (2026-27 edition):
Admission of a New Partner – “… Following are the other important points which require attention at the time of admission of a new partner: 1. New profit sharing ratio; 2. Sacrificing ratio; 3. Valuation and adjustment of goodwill; 4. Revaluation of assets and Reassessment of liabilities; 5. Distribution of accumulated profits (reserves); and 6. Adjustment of partners’ capitals.”