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Question
The account which is prepared to adjust the increase or decrease in the value of assets at the time of admission of a partner is called:
Options
Realisation Account
Revaluation Account
Profit and Loss Account
None of these
MCQ
Solution
Revaluation Account
Explanation:
The Revaluation Account is set up to compensate for the growth or reduction in the values of assets and liabilities at the time of a partner's admission.
The Realisation Account is prepared at the moment of the firm's dissolution.
Regardless of the firm's reconstitution, the profit and loss account is prepared when the final accounts are prepared.
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Admission of a Partner - Revaluation of Assets and Liabilities
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