alleryRevaluation A/c is prepared on admission to
AShow the new partner (typical) (typical)
BBring assets and liabilities to fair value
CCalculate goodwill (typical) (typical)
DClose partner accounts (typical) (typical)
Answer & Solution
Correct answer: B. Bring assets and liabilities to fair value
1. On admission, recorded book values may not equal real values.
2. Revaluation A/c restates assets and liabilities to current fair values.
3. Net gain/loss on revaluation is shared among OLD partners in old ratio.
4. Hence (B) is its purpose.
_Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 3 "Reconstitution of Partnership (Admission of Partner)", §3.4 ¶§3.4_
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