In case of admission of a new partner, Match the LIST-I with LIST-II.…

In case of admission of a new partner, Match the LIST-I with LIST-II.

LIST-I		LIST-II
A.	Increase in Assets	I.	Debit side of Partners' Capital A/c
B.	Adjustment for Accumulated Profits and Losses A/c	II.	Credit side of Revaluation A/c
C.	Increase in Liabilities	III.	Credit side of Partners' Capital A/c
D.	Existing goodwill written off	IV.	Debit side of Revaluation A/c

Choose the correct answer from the options given below.

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A-II, B-III, C-IV, D-I

On the admission of a partner, the gain or loss on revaluation, the accumulated profits and the goodwill already in the books all belong to the period before the new partner joined. So each of them is settled through the Revaluation Account or through the old partners’ capital accounts.

(A) Increase in Assets — this matches (II) Credit side of Revaluation A/c. A rise in the value of an asset is a gain, and gains are credited to the Revaluation Account.

(B) Adjustment for Accumulated Profits and Losses A/c — this matches (III) Credit side of Partners’ Capital A/c. Accumulated profits such as the General Reserve are carried to the old partners’ capital accounts in the old ratio, so those accounts are credited. The new partner gets no share in them.

(C) Increase in Liabilities — this matches (IV) Debit side of Revaluation A/c. A higher liability means the firm owes more, which is a loss, so it is debited to the Revaluation Account.

(D) Existing goodwill written off — this matches (I) Debit side of Partners’ Capital A/c. Goodwill already in the books is written off by debiting the old partners’ capital accounts in their old ratio, since it was built up in their time.

NCERT (2026-27 edition):
Revaluation of Assets and Reassessment of Liabilities – “… 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.”

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. Similarly, if there are some accumulated losses in the form of a debit balance of profit and loss account and/or deferred revenue expenditure appearing in the balance sheet of the firm.”

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.”