How do you close revaluation account on admission of a new partner
Answers
Answer:
Revaluation Account is a nominal account which is used to make at the time of admission, retirement or death of a partner. This account is made to ascertain the changes in the value of assets and liabilities of the firm.
The profit or loss arising out of revaluation of assets and liabilities, is transferred to Old partner's capital account in their old profit sharing ratio.
The new (or admitting) partner has nothing to do with the profit or loss of the Revaluation account. Only Old partners share it.
Explanation:
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Answer:
Revaluation Account is a nominal account which is used to make at the time of admission, retirement or death of a partner. This account is made to ascertain the changes in the value of assets and liabilities of the firm.
The profit or loss arising out of revaluation of assets and liabilities, is transferred to Old partner's capital account in their old profit sharing ratio.
The new (or admitting) partner has nothing to do with the profit or loss of the Revaluation account. Only Old partners share it.
Hope you understood. Thank you.