[amp_mcq option1=”Profit and loss adjustment A/c” option2=”Capital A/c of old partners” option3=”Assets A/c” option4=”Profit and loss A/c” correct=”option1″]
The correct answer is: A. Profit and loss adjustment A/c
When a new partner is admitted into a partnership, the assets of the partnership are usually revalued. This is done to ensure that the new partner is paying a fair price for their share of the partnership. The increase in the value of the assets is credited to the profit and loss adjustment account. This account is used to record any changes in the partners’ capital accounts.
The other options are incorrect because:
- Option B: The capital accounts of the old partners are not affected by the increase in the value of the assets.
- Option C: The assets account is not affected by the increase in the value of the assets.
- Option D: The profit and loss account is used to record the profits and losses of the partnership. It is not used to record changes in the value of the assets.
I hope this helps! Let me know if you have any other questions.