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On the admiss...

Question

On the admission of a new partner, the decrease in the value of assets is debited to:

A

Asset Account

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B

Profit & Loss Adjustment Account

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C

Old Partner's Capital Account

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D

None of the above

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Solution

The correct option is B Profit & Loss Adjustment Account
A Memorandum Profit and Loss Adjustment Account will be opened in the books. The increase in the value of assets or decrease in the value of liabilities will be credited to this account.

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