Question

If Balance Sheet of new firm is prepared after admission of a partner, assets are shown in it at their: *



Historical Cost

Market Value

Realisable Value

Revalued Value

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Answer 1

Answer:

d) revalued value

Explanation:

New partnership means reconstruction of the firm due to admission, retirement and death. When partnership is reconstructed, new balance sheet at revalued figure is prepared. Because old balance sheet is related to old partners and profit or loss on revaluation is distributed among old partners. A new balance sheet with new figures is prepared for new partners.