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If a firm distributes revaluation loss in the new ratio why is it wrong?

Answer and explanation

Correct answer: Because the loss belongs to the pre-admission period and old partners

Revaluation loss relates to assets and liabilities before admission. Therefore it must be shared by old partners in the old ratio.

Related tags

Common MistakeNew RatioOld PartnersAsset RevaluationReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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