Accountancy Part AAdmission of a Partner

A newly admitted partner has the right to -

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Share the profit of firm after his admission

A new partner becomes entitled to a share in the future profits of the firm, and to a share in its assets from his admission onwards, for which he brings his capital. Whatever the old partners earned or saved before that date belongs to them.

Why the other options are incorrect

Option (2) Share the assets of the firm before his admission — Incorrect. Gains on assets up to the date of admission are adjusted among the old partners through the Revaluation Account.
Option (3) Share the general reserve already appearing in the Balance Sheet before his admission — Incorrect. Reserves are accumulated profits of the old partners and are transferred to them in the old ratio.
Option (4) Demand extra-profit than his agreed share if business makes huge profits — Incorrect. He gets only the share agreed at admission, whatever the size of the profit.

NCERT (2026-27 edition):
Admission of a New Partner – “… A newly admitted partner acquires two main rights in the firm– 1. Right to share the assets of the partnership firm; and 2. Right to share the profits of the partnership firm.”

NCERT (2026-27 edition):
Adjustment for Accumulated Profits and Losses – “Sometimes a firm may have accumulated profits not yet transferred to capital accounts of the partners. These are usually in the form of general reserve, reserve and/or Profit and Loss Account. The new partner is not entitled to have any share in such accumulated profits. These are distributed among the partners by transferring it to their capital current accounts in old profit sharing ratio.”

A newly admitted partner has the right to -

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → Share the profit of firm after his admission

Why the other options are incorrect

Option (2) Share the assets of the firm before his admission — Incorrect. Gains on assets up to the date of admission are adjusted among the old partners through the Revaluation Account.
Option (3) Share the general reserve already appearing in the Balance Sheet before his admission — Incorrect. Reserves are accumulated profits of the old partners and are transferred to them in the old ratio.
Option (4) Demand extra-profit than his agreed share if business makes huge profits — Incorrect. He gets only the share agreed at admission, whatever the size of the profit.