Question

Which of the following is not readjusted at the time of admission of a new partner?

Options

• Capital Account

• Profit-Sharing Ratio 

• Profit and Loss Account

• None of the above

Answer 1

Profit and Loss Account

Explanation:

The Profit and Loss Account is not readjusted when a new partner is admitted; only the capital account and profit-sharing ratio are adjusted. Changes in the value of assets and liabilities are recorded in the revaluation account.