Question

State 'True' or 'False'

Profit on revaluation account is distributed between the old partners on admission of a partner.

Answer 1

True

Explanation: Revaluation Account is prepared to record the effect of changes in the values of assets and liabilities prior to the admission of a new partner. If there is any profit on such revaluation, then it belongs to the existing partners only, since the new partner has no right on such profit arising out of revaluation.