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

Answer: (D)

Revaluation A/c

When a new partner is admitted or old partner is retired or died, assets are revalued and liabilities are reassessed. A revaluation 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. The difference in two sides of account will show profit or loss. This transferred to the capital Accounts of old partners in the old profit sharing ratio.