On the admission of a new partner if the partners decide to record change occurred in the value of assets and liabilities in books but not accounts then the firm prepares.

The correct answer is: D. Memorandum revaluation account

A memorandum revaluation account is a temporary account used to record the revaluation of assets and liabilities on the admission of a new partner. The account is closed at the end of the financial year and the revaluation gains or losses are transferred to the partners’ capital accounts.

A profit and loss appropriation account is used to allocate profits or losses to the partners’ capital accounts. A profit and loss adjustment account is used to adjust the partners’ capital accounts for items such as unrealized profits or losses on assets. A revaluation account is used to record the revaluation of assets and liabilities.

Here is a more detailed explanation of each option:

• A. Profit and loss appropriation account

A profit and loss appropriation account is used to allocate profits or losses to the partners’ capital accounts. The account is prepared at the end of the financial year and shows the amount of profit or loss that each partner is entitled to. The profit or loss is allocated in accordance with the partnership agreement.

• B. Profit and loss adjustment account

A profit and loss adjustment account is used to adjust the partners’ capital accounts for items such as unrealized profits or losses on assets. The account is prepared at the end of the financial year and shows the amount of adjustment that each partner’s capital account needs to be adjusted by. The adjustment is made in accordance with the partnership agreement.

• C. Revaluation account

A revaluation account is used to record the revaluation of assets and liabilities. The account is prepared when the value of an asset or liability changes. The revaluation gain or loss is transferred to the partners’ capital accounts in accordance with the partnership agreement.

• D. Memorandum revaluation account

A memorandum revaluation account is a temporary account used to record the revaluation of assets and liabilities on the admission of a new partner. The account is closed at the end of the financial year and the revaluation gains or losses are transferred to the partners’ capital accounts.