On the admission of a new partner, an increase in the value of assets is debited to:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Assets account
An increase in the value of an asset is recorded by debiting that asset’s account, so the books show its new higher value. The other side of the entry is a credit to the Revaluation Account (also called Profit and Loss Adjustment Account), because the rise is a gain: Asset A/c Dr., To Revaluation A/c.
NCERT (2026-27 edition):
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