Question

Decrease in liability at the time of retirement partner is _______________.

• A. Debited to Goodwill A/c
• B. Debited to Profit & Loss A/c
• C. Debited to Revaluation A/c
• D. Credited to Revaluation A/c

Answer 1

The correct option is D Credited to Revaluation A/c

Retirement of partner leads to dissolution of partnership. Assets and liabilities are revalued at this time. Change in value of assets and liabilities are recorded in new account, called revaluation account. Increase in assets and decrease in liabilities is recorded in credit side and increase in liabilities and decrease in assets is debited to revaluation account.