On the admission of a new partner, the decrease in the value of assets is debited to__________.

profit and loss adjustment account

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asset account

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old partner's capital account

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old partner's current account

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Solution

The correct option is B profit and loss adjustment account
When a new partner is admitted into the partnership, assets are revalued and liabilities are reassessed. A revaluation account or profit or loss adjustment account is opened for the purpose. This account is debited with all reduction in the value of assets and increase in liabilities and credited with increase in the value of assets and decrease in the value of liabilities.

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