State any two reasons for the preparation of ‘Revaluation Account’ in case of admission of a Partner? (CBSE Sample Paper 2018)


Two reasons for preparation of ‘Revaluation Account’ at time of admission of a partner are:
(i) To record the effect of revaluation of assets and liabilities.
(ii) To ensure that the gain (profits) or loss on revaluation of assets and liabilities may be divided amongst the old partners.

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