Question

To revalue assets & liabilities on admission, retirement or death of partner ________ is opened.

• A. Goodwill A/c
• B. Suspense A/c
• C. Adjustment A/c
• D. Revaluation A/c

Answer 1

The correct option is D Revaluation A/c

At the time of admission, retirement or death of a partner 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 in their old profit sharing ratio.