{"id":56661,"date":"2024-04-16T00:48:32","date_gmt":"2024-04-16T00:48:32","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=56661"},"modified":"2024-04-16T00:48:32","modified_gmt":"2024-04-16T00:48:32","slug":"on-the-admission-of-a-new-partner-any-increase-in-the-value-of-buildings-is-credited-to","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/on-the-admission-of-a-new-partner-any-increase-in-the-value-of-buildings-is-credited-to\/","title":{"rendered":"On the admission of a new partner, any increase in the value of Buildings is credited to"},"content":{"rendered":"

[amp_mcq option1=”Buildings Account” option2=”Profit and Loss Account” option3=”Revaluation Account” option4=”All Partner’s Capital Account” correct=”option3″]<\/p>\n

The correct answer is C. Revaluation Account.<\/p>\n

When a new partner is admitted to a partnership, the assets and liabilities 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. Any increase in the value of the assets is credited to the Revaluation Account. This account is then used to adjust the capital accounts of the existing partners.<\/p>\n

Option A is incorrect because the Buildings Account is an asset account. When a new partner is admitted, the assets of the partnership are revalued, but the Buildings Account is not credited directly. Instead, the increase in the value of the Buildings is credited to the Revaluation Account.<\/p>\n

Option B is incorrect because the Profit and Loss Account is a revenue account. The Profit and Loss Account is used to record the income and expenses of the partnership. When a new partner is admitted, the Profit and Loss Account is not affected.<\/p>\n

Option D is incorrect because the capital accounts of the existing partners are adjusted using the Revaluation Account. The Revaluation Account is a temporary account that is used to record the revaluation of the assets and liabilities of the partnership. Once the revaluation is complete, the balance in the Revaluation Account is transferred to the capital accounts of the existing partners.<\/p>\n","protected":false},"excerpt":{"rendered":"

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