CUET Accountancy 2024
Accountancy
Admission of a Partner
Easy
- (A) Increase in assets
- (B) Drawings against capital
- (C) Recording of unrecorded assets
- (D) Decrease in liabilities
Which of the following would affect the Revaluation Account at the time of admission of a partner?
Which of the following would affect the Revaluation Account at the time of admission of a partner?
Correct Option: 3
When a new partner joins a business, the Revaluation Account is used to adjust the value of the assets and liabilities. This helps to reflect the true worth of the business before the new partner invests.Assets are things the business owns, like cash or property. An increase in assets (Option A) means the business is worth more, which is important for the new partner's share.Drawings against capital (Option B) refer to money taken out by partners. This does not directly affect the Revaluation Account because it’s about personal withdrawals, not the business's value.Unrecorded assets (Option C) are assets that were not previously noted in the books. Recognizing these increases the total value of the business, impacting the Revaluation Account.Liabilities are what the business owes. A decrease in liabilities (Option D) means the business is in a better financial position, which can also affect the Revaluation Account.So, the Revaluation Account is influenced by increases in assets (A), and the recording of unrecorded assets (C), and decreases in liabilities (D).Thus, the correct answer is Option 3: (A), (C), and (D) only.
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CUET Accountancy 2024