Accountancy Part AAdmission of a Partner

Arrange the following steps in the correct sequence after admission o…

Arrange the following steps in the correct sequence after admission of a new partner:

(A) Revaluation of Assets and Liabilities

(B) Calculation of New Profit Sharing Ratio and Sacrificing Ratio

(D) Distribution of Accumulated Profits and Reserves in the capital accounts

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (B), (A), (D), (C)

On admission, the adjustments are made in this order, and the Balance Sheet of the new firm is prepared last:

(B) Calculation of New Profit Sharing Ratio and Sacrificing Ratio
(A) Revaluation of Assets and Liabilities
(D) Distribution of Accumulated Profits and Reserves in the capital accounts
(C) Preparation of Balance Sheet

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.”