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JAMB Principles of Accounts 2004 Question 41

Question 41

Partnership Admission, Retirement and Dissolution

When a new partner is admitted to a partnership, there is a need to revalue the

  1. A.capital of the business
  2. B.capital and liabilities of the business
  3. C.assets and capital of the business
  4. D.assets and liabilities of the business
Show the answer and explanation

Answer: D (assets and liabilities of the business)

Explanation

On admission the assets and liabilities are revalued so that gains or losses up to that date go to the old partners.