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Old partners share profits in 6:4. Revaluation loss is ₹70000. Why must it be adjusted in capital accounts before admitting the new partner?

Answer and explanation

Correct answer: So that pre-admission loss is borne by old partners

Revaluation loss relates to the old business period. For fair accounting it is adjusted among old partners in the old ratio.

Related tags

Fair AdjustmentOld PartnersLossAsset RevaluationReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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