Question

Increase in value of assets at the time of admission of a partner is ___________.

• A. Credited to revaluation A/c
• B. Debited to revaluation A/c
• C. Credited to partner capital A/c
• D. Debited to profit and loss A/c

Answer 1

The correct option is A Credited to revaluation A/c

Credited to revaluation A/c

Revaluation account is opened for the purpose of revaluing assets and liabilities. This account is debited with all reduction in the value of assets, increase in liabilities and unrecorded liability and credited with increase in the value of asset, decrease in value of liability and unrecorded asset. The difference in two sides of account will show profit or loss which is then transferred to partners capital account.