Question

State the two reasons for the preparation of 'Revaluation Account' at the time of admission of a partner

Answer 1

revaluation means revaluating the fixed assets after admission or after retirement

Answer 2

The two reasons for which revaluation account is prepared at the time of admission of a new partner are:

Such an account is essential to be fixed as it registers every shift in the liabilities of a corporation, which is expected for the new associate to apprehend.

As new associate will not be willing to sustain the damage during the period before his acceptance.

Moreover the old associates will not be willing to distribute the earnings during the period before his acceptance.