Question

Select the most appropriate answer from the alternative given below and rewrite the sentence.

In case of admission of a partner, the profit or loss on revaluation of assets and liabilities is shared by _________________ partners.
a) all
b) old
c) new
d) none of these

Answer 1

In case of admission of a partner, the profit or loss on revaluation of assets and liabilities is shared by old
partners.

Explanation: In case of admission of a partner, the profit or loss on revaluation of assets and liabilities is shared by the old partners in their old profit-sharing ratio. This is because profit on revaluation of assets and liabilities is a gain for the existing partners only and the new partner has no right on such profits earned prior to his/her admission.