Match List-I with List-II. LIST I(Items to be adjusted on admission)…

Match List-I with List-II.

LIST I (Items to be adjusted on admission)	LIST II (side of account)
(A) Existing goodwill	(I) Debit of capital account
(B) Increase in value of assets	(II) Debit of revaluation account
(C) Decrease in value of assets	(III) Credit of revaluation account
(D) New partner capital	(IV) Credit of capital account

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (A)-(I), (B)-(III), (C)-(II), (D)-(IV)

On admission, goodwill already in the books is written off among the old partners, and changes in asset values pass through the Revaluation Account: a gain is credited to it and a loss is debited to it.

(A) Existing goodwill — this matches (I) Debit of capital account. Goodwill already appearing in the books is written off by debiting the old partners’ capital accounts in their old ratio.

(B) Increase in value of assets — this matches (III) Credit of revaluation account. A rise in an asset’s value is a gain, so it is credited to the Revaluation Account (Asset A/c Dr., To Revaluation A/c).

(C) Decrease in value of assets — this matches (II) Debit of revaluation account. A fall in value is a loss, so the Revaluation Account is debited (Revaluation A/c Dr., To Asset A/c).

(D) New partner capital — this matches (IV) Credit of capital account. The capital brought in by the new partner is credited to his capital account (Bank A/c Dr., To New Partner’s Capital A/c).

NCERT (2026-27 edition):
When the new partner does not bring goodwill in cash, partly or fully – “… When goodwill exists in the books : Goodwill appearing in the books will be written-off by debiting old partners ‘capital accounts in their old profit sharing ratio. Thereafter new value of goodwill will be given effect by crediting sacrificing partners' capital accounts and debiting new partners’ current account.”

NCERT (2026-27 edition):
Revaluation of Assets and Reassessment of Liabilities – “… For this purpose the firm has to prepare the Revaluation Account. The gain or loss on revaluation of each asset and liability is transferred to this account and finally its balance is transferred to the capital accounts of the old partners in their old profit sharing ratio. In other words, the revaluation account is credited with increase in the value of each asset and decrease in its liabilities because it is a gain and is debited with decrease in the value of assets and increase in its liabilities is debited to revaluation account because it is a loss.”