Question

To which account unrecorded asstes/liabilities are transferred?

• A. Partners capital A/c
• B. Revaluation A/c
• C. Profit and loss appropriation A/c
• D. Any of the above

Answer 1

Answer: (B)

Revaluation A/c

At the time of retirement or death of a partner, the books of accounts of the firm have to be settled. The outgoing partner or his legal representatives have to be paid their dues. For calculation of correct amount to be paid, it is important that all assets and liabilities must be recorded at their current values and if there is any unrecorded assets and liabilities that should also be recorded. For this. A revaluation account is opened. A revaluation account is prepared to ascertain net profit or loss on revaluation of assets and liabilities and bringing unrecorded items into books. '