Question

Gain/loss on revaluation at the time of change in profit sharing ratio of existing partners is shared by ___(i)___ whereas in the case of admission of a partner, it is shared by ___(ii)___.

पर्याय

• (i) Remaining Partners, (ii) All Partners.

• (i) All Partners, (ii) Old partners.

• (i) New Partner, (ii) All partners.

• (i) Sacrificing Partner, (ii) Incoming partner.

Answer 1

Gain/loss on revaluation at the time of change in profit sharing ratio of existing partners is shared by all partners whereas in the case of admission of a partner, it is shared by old partners.

Explanation:

Gains or losses from the revaluation of assets and liabilities are considered realized up to the date of the change or admission.

• Change in Profit Sharing Ratio: When existing partners simply change their ratio, the revaluation impacts the current partners who were part of the firm during the period the asset values changed. Therefore, it is shared by all existing partners (i) in their old ratio.
• Admission of a Partner: The revaluation adjustments relate to the value of assets and liabilities before the new partner was admitted. Thus, the gain or loss is shared only by the old partners (ii) in their old ratio.